Comments on Track 2 working groups

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

ACP-California appreciates the significant work that CAISO and stakeholders have put into the IPE Track 2 working group meetings and discussions over the last three months. ACP-California encourages CAISO to explore and consider all the stakeholder proposals presented at the working groups as thoughtful evaluation of each proposed concept is warranted in developing a comprehensive Straw Proposal to address this complex and challenging issue. While we agree that comprehensive reforms to the interconnection and queue management processes are needed to ensure the timely interconnection of new resources to meet state policy and reliability needs, we do not offer a thorough review of each proposal that has been presented to date or a comprehensive proposal for how to proceed. Rather, below, we offer the following limited comments to CAISO for consideration of the elements and concepts that we support at this juncture.

1. Interconnection Request Intake

ACP-California generally supports the high-level approach put forward by CAISO for managing interconnection request intake at the August 1^st meeting, with some important caveats, adjustments, and items for further consideration/discussion within the stakeholder process. We generally support the proposals for (and highlight the value of) increased data accessibility, support the implementation of new/more stringent interconnection request requirements and support development of an “Option A” and “Option B” process for interconnection, with a viable path for Option B projects to move forward. Below we provide additional comments on these elements of a proposal to address interconnection request intake.

1. Indicative Commercial Readiness Requirement for Option A Projects

The implementation of new and more stringent interconnection request requirements is an important component of effective interconnection reforms. And, generally, ACP-California agrees that the inclusion of higher entry fees/deposits and stronger eligibility requirements is appropriate. As also discussed in response to question #3, we suggest that CAISO consider use of an additional eligibility requirement for projects that are seeking Option A to enter the queue. Specifically, ACP-California urges CAISO to consider whether a requirement to have some form of commercial readiness for Option A requests (and only Option A requests) would be appropriate. If a commercial readiness requirement were implemented the “Indicative Commercial Interest” concept ACP-California put forward in previous IPE comments, whereby LSEs, corporate offtakers, or other state procurement entities could identify high priority projects without requiring an executed PPA. This process should qualify as a commercial interest metric for Option A projects to enter the queue. Implementing this requirement would help reduce the burden and criticality of developing scoring criteria for Option A (though they would still be needed), and would reduce the need for auctions or other mechanisms to allocate Transmission Plan Deliverability (TPD) to Option A by restricting the number of projects that could request Option A in the first place.

2. Scoring Criteria to Identify and Rank Projects

That said, even with the use of a commercial interest screen for Option A that includes Indicative Commercial Interest, ACP-California agrees that there is a clear need to develop scoring criteria to identify and rank projects that are eligible for a TPD allocation. The application of a scoring system would help process the Option A queue when its intake volumes exceed the available TPD in a given zone. And we look forward to CAISO’s suggestions for the scoring of Option A projects in the Straw proposal.

3. Option B Process

While Option A may be used by most interconnection customers, it is critical to include an alternative Option (Option B) that will allow unique, merchant, long lead-time, or other projects that don’t qualify for Option A to proceed and achieve interconnection. Such an option is crucial maintaining open access under the proposed reforms. And, Option B is vital because, as noted by several stakeholders (including LSA), no mechanism for screening interconnection requests will be able to account for all aspects of a project’s readiness or value. Therefore, ACP-California supports both an appeals process for projects that are not selected in Option A initially and the development of a highly robust Option B process. The robust Option B process should provide a viable alternative path for projects that are not selected under Option A to be studied and achieve interconnection to the system. This process would become an essential avenue for projects if the screening criteria goes forward, as it would enable projects that were not selected due to lower scores or those located outside the targeted transmission zones to provide proof of their benefits and operational capabilities so they might be considered for the same study period. Option B could also provide a path for resources that are part of state policy, that might not be able to proceed through Option A yet, to proceed towards identification of necessary transmission upgrades and interconnection.

While ACP-California generally agrees that reforms to the Option B process could include higher non-refundable security postings and appreciates CAISO’s intention to consider longer-term interim deliverability as a unique and needed benefit that might not be considered under the Option A screening process, we urge CAISO to be inclusive on what Option B reforms are being considered in the Straw Proposal. Many stakeholders presented creative concepts for improving this process during the July 11^th meeting, and CAISO should include these components in their proposal so that stakeholders may have an opportunity to give them further consideration and reach broad alignment on a framework as IPE progresses.

2. Queue Management

For managing the current volume of the queue, ACP-California supports consideration of the stakeholder proposals put forward during the July 24^th working group meeting, including the development of more stringent requirements for projects to remain in the queue. However, the interconnection of most new resources is contingent on the completion of necessary network upgrades. And the completion of network upgrades has been experiencing large delays in recent years. Therefore, it is critical that any requirements placed on resources to interconnect in a timely manner should include procedural guarantees so that generators are not held unduly responsible for delays in permitting and constructing of network upgrades by participating transmission owners. We encourage the CAISO to explore ways to provide earlier assurance of interim deliverability as a partial solution to these timing challenges. And reforms should ensure that there is flexibility when projects are proceeding but may face unique circumstances. In other words, the requirements for generators to remain in the queue should not be implemented in an overly stringent manner that causes viable and progressing projects to be removed from the queue. This result would be detrimental to not only the generators but also their offtakers and customers across the CAISO and, therefore, should be avoided as these reforms are considered. Finally, we also encourage CAISO to explore how to create shared accountability among process stakeholders, as suggested by Gridstor, as a part of this initiative.

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

1. Interconnection Request Intake

While ACP-California believes CAISO should evaluate all concepts and proposals comprehensively, we note some concerns with the use of an auction for selecting projects to receive TPD allocation. The combination of scoring criteria to assess viability and availability of a robust Option B process should be able to reduce or prevent the need for the use of an auction process. The implementation of an auction process would be complex, time-consuming, and potentially contentious. And, additionally, an auction process may inappropriately disadvantage long lead-time resources like Offshore Wind and Out-of-State Wind which already face significant early capital investment risk years before any expected revenues. Requiring these resources to commit additional (likely significant) funds early in the development process via an auction would further challenge developers and disadvantage a set of resources that are critical to meeting the state’s clean energy and reliability needs. Should CAISO consider an auction process in their Straw Proposal, ACP-California suggests there be careful evaluation of the impacts of further financial commitment early in the development process, especially for long-lead time resources, and focus on the potential uses of any auction funds early in its assessment and that the Option B process is designed in a way to allow these types of resources to proceed through Option B.

2. Queue Management

As discussed in response to question #1, if additional requirements/restrictions are placed on resources to remain in the queue, it is crucial that they be designed in a way that they do not hold generators accountable for PTO delays and that they provide an appropriate level of flexibility.

One area of CAISO’s proposal for queue management discussed at the August 1^st meeting that ACP-California has strong concerns with is the proposed elimination of suspension rights in interconnection agreements. While we understand CAISO’s interest in proposing this elimination to address the management of the queue, we find it highly concerning and problematic to eliminate generator’s suspension and would oppose such a proposal, which could set precedent for elimination of these rights in other regions of the country. Suspension rights provide indispensable flexibility to generators in the interconnection process, a process where they generally do not have much flexibility. FERC has consistently found that pure elimination of suspension rights is not just and reasonable. If suspension rights were to be modified, at a minimum, CAISO should provide other types of flexibility to generators to address permitting and other delays that may affect projects. This is even more important today than it has been in the past given supply chain issues and other developments that have the potential to delay projects.

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

1. Interconnection Request Intake

1. Scoring Criteria to Identify and Rank Projects

As we mentioned in Question #1, ACP-California supports the development of scoring criteria to assess the viability of projects that will be selected as Option A. We suggest use of a commercial readiness screen for Option A (if it includes the Indicative Commercial Interest previously proposed by ACP-California), in addition to a ranked commercial readiness scoring criteria in the scoring process. This would involve establishing ranked levels of commercial interest and assigning different point values based on that ranking. This concept was reflected in other stakeholder proposals, including AES, and allows project point values to better reflect their commercial feasibility.

Notably, ACP-California recommends the addition of the “Indicative Commercial Interest” to these rankings. The Indicative Commercial Interest allocation provides offtakers with a limited amount of commercial interest to express an interest in without requiring the signing of PPAs, terms sheet, or the development of an RFP shortlist. It thereby provides an indication of procurement interests in a particular resource but without requiring any commitment or formal procurement activity to take place. And we recommend CAISO consider its use in the interconnection requirement and/or scoring processes. Though we have not suggested point allocations for the commercial readiness scoring criteria, ACP-California suggests the following rankings from highest to lowest be used for Option A project scoring:

• Executed PPA
• Executed terms sheet
• Shortlist for resource plan/RFP
• Indicative commercial interest allocation

And we reiterate again here the need for a strong and viable Option B process for resources that do not meet these criteria to proceed forward through. ACP-California appreciates for the opportunity to comment on IPE Phase 2 and looks forward to continued participation in this initiative at it progresses.

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

AES applauds the CAISO and stakeholders for its tremendous effort in providing a stakeholder engagement process and allowing stakeholders to present proposals in a short time frame.  AES recognizes the interconnection issues faced by CAISO are in need of change in order to meet California’s clean energy goals. AES supports the discussed Principles and Problem Statements as discussed in the working groups.[1]  Below, AES provides comments on proposals best fit to meet the problem statements, while supporting the reform principles.

1) Interconnection request intake

AES believes its interconnection proposal is best suited to address problem statement #1 to revise the interconnection intake process while meeting the six reform principles. AES’s proposal increases transparency, certainty, and coordination amongst state agencies by introducing two elements including (1) an Annual Interconnection Overview Review Report and (2) Preliminary Scoring Point System for Interconnection Priority Zones.

Within AES’s proposal, the Annual Interconnection Overview Report (Annual Report) focuses on providing increased data, pricing transparency, and preferred resource guidance to interconnection customers.  At minimum, the Annual Report would provide details including the current available capacity,  timing of planned deliverable capacity in each TPP zone, load changes in each TPP zone, the status of current queue, substation in each TPP zone, the MW ability for each substation to expand, firm price range per MW for network upgrade interconnections in each TPP zone, average line tap cost, and a clear rubric of needed resources based on coordination with state planning agencies.  The Annual Report must be published at least 6 months prior to the opening of the queue cluster window to allow developers to process the information. To be studied in the upcoming cluster, AES proposes a scoring criterion to determine projects eligible for the interconnection priority zones (IPZs). Projects would be allocated points based on the projects achieved level of site control, financial readiness, LSE interest, procurement of long lead time equipment, permits, engineering design, placement in energy communities, and resource diversity. More ready projects would receive higher points compared to less ready projects. AES recommends basing each category on a 100-point scale to allow for greater variation in scores to reduce the likelihood of CAISO staff having to arbitrarily select between projects that may exist on a 10-point scale as used in the TPD allocation process.  To select projects in the IPZs that would go into the interconnection studies, CAISO would list projects from highest points to lowest points and select projects in descending order to fulfill the 1.5x of the available and planned capacity in each TPP zone. Projects that aren’t selected can (1) proceed as an Option B project, (2) proceed as energy only, or (3) reapply during the next cluster cycle. Projects outside of the IPZs can also apply to be studied by providing supplemental information through third-party studies and receiving points based on the same criterion. AES also recommends that CAISO adopt a minimum score for project admittance to the interconnection cluster study to maintain project quality year over year.

AES believes stakeholder proposals from Avantus, New Leaf, Intersect, and Vistra have merit and can complement AES’s proposal. Avantus proposes CAISO and PTOs to inform stakeholders the level of capacity that can be brought online based on a COD year for each priority zone.[2] AES’s proposed Annual Report can include additional information stating the level of capacity that can be brought online based on existing or planned transmission capacity without triggering larger upgrades. In addition, New Leaf’s proposes to prioritize local resource adequacy projects in queue entry. This can be included as an additional metric in AES’s proposed scoring criteria. Intersect’s proposal is very similar to AES’s by proposing to establish a reasonable maximum total queue capacity and institute readiness criteria to study an appropriate level of projects to maintain meaningful study results. AES’s proposal as is can fulfill the principles laid out by Intersect. Finally, Vistra’s proposes a network upgrade subscription model that allows interconnection customers to subscribe to a proportion of network upgrades to support the build out of their projects. This proposal allows interconnection customers to make upfront financial commitments and can be included as an additional scoring metric by awarding subscribed customers with additional points.

AES also generally supports proposals presented by PG&E, SDG&E, and SCE. All proposals, with some variation, focus on simplifying the interconnection request data submittal packages and simplifying Phase 1 interconnection studies with generic models.  AES believes that removing data submittals such as Attachment A to Appendix 1, load flow model, dynamic model, and reactive power capability document can increase the speed to valid interconnection packages without jeopardizing meaningful study results. Conducting Phase 1 interconnection studies with generic load flow and dynamic models can also increase the efficiency of the study process while providing sufficient study results to developers.

2) Queue management

AES believes the following proposals are the most meaningful to address problem statement #2 including: 1) creating a list of changes that don’t require a material modification assessment (MMA); (2) increasing MMA study timing certainty during the validation process; (3) simplifying MMA modeling requirements; (4) implementing a one-time withdrawal opportunity; and (5) requiring PTOs to move forward with upgrades once the IC issues the Notice to Proceed (NTP). 

AES generally supports enhancements to the MMA process.  AES highly supports LSA’s proposal to expand the list of changes that don’t require MMA submissions.  These changes should include inverter changes, gen-tie combinations, and date changes that are generally approved by the CAISO in today’s MMA process.  AES supports allowing ICs to make these changes directly in RIMS, effectively reducing the volume of MMAs needed for CAISO staff review.  In addition, AES Clean Energy supports LSA proposal to adopt timing targets for the CAISO and PTO to conduct the initial validation review for MMA requests. From AES’s experience, the initial validation process can delay the start of the MMA study process up to 6 months due to iteration between CAISO, PTO, and IC. Establishing timelines for validation review can help all parties plan appropriately and minimize delays.  AES believes Clearway’s proposal to require a CAISO, PTO, and IC call within 15 calendar days of an MMA submittal can be complementary to LSA’s proposal for timing targets during the validation process. Finally, AES supports Clearway’s proposal to simplify certain MMA request modeling requirements for requests that do not require modeling changes, such as adding grid charging and extending CODs. MMA requests that do not require modeling changes should be allowed to use the previously PTO-approved validated models.

AES Clean Energy generally supports a one-time withdrawal opportunity all projects in the queue for all clusters, including Cluster 15.  All projects currently in the queue should have the opportunity to withdraw given the CAISO’s intention to make drastic changes in this stakeholder process. In addition, AES Clean Energy supports Rev Renewable’s proposal to require PTOs to move forward with upgrades once the NTP is issued.  From AES Clean Energy’s experience, there can be 3–6-month delay between the NTP issuance and proceeding with network upgrades

[1] Revised-Principles-and-Problem-Statements-Interconnection-Process-Enhancements-2023-Track 2-Jun 20-212023.pdf (caiso.com)

[2] Presentation-Interconnection-Process-Enhancements-2023-Track 2-Working-Group-Jul112023.pdf (caiso.com), p. 105.

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

1) Interconnection request intake

AES does not believe Savion’s auction proposal can appropriately address problem statement 1 and adhere to the six reform principles. Savion proposes an auction methodology to secure queue positions. The proposal would require interconnection customers to bid their application in future queues for a specific study cycle to secure a queue position. Interconnection customers then have the opportunity to do bilateral exchanges on a bulletin board to bull or sell queue positions.[1] AES believes this auction proposal does not recognize the development process by proposing potential customers to bid queue positions up to 10 years in advance. This proposal simply allows potential customers to purchase a queue position without recognizing whether or not the project is ready for study.  Moreover, it is unclear how Savion’s proposal can align the interconnection, transmission plan deliverability processes, and resource procurement functions as projects are seeking queue positions 10 years prior to interconnection studies.  Finally, the ability to make bilateral exchanges of queue positions can potentially create market power issues.

Furthermore, AES would oppose the CAISO implementing any form of an auction at any point in the interconnection process. Auctions are an inappropriate mechanism to allocating queue positions or transmission capacity, and would simply increase rate-payer costs without adding value to the process. AES does not believe the CAISO has sufficient time or expertise to design an effective auction mechanism and should focus more on developing robust scoring criteria or subscription models to allocate queue positions/transmission capacity.

2) Queue management

AES does not believe the following proposals appropriately address problem statement #2 including: 1) mandating a development timeline in the queue; (2) limiting COD extension to once after LGIA execution; (3) limiting MMAs to once a year; and (4) withdrawing projects that transfer TPD allocation

AES does not believe that creating a hard stop development timeline, such as 10 years in the queue, is a proper metric on project viability. Each project has its unique challenges, resulting in varying developing timelines.  Instead of mandating a development timeline, AES supports milestone requirements demonstrating development progress.  In addition, AES does not support Vistra’s and Gridwell’s proposal to limit COD extensions to one time after LGIA execution. AES believes there are many factors outside of the developer’s control, such as network upgrade delays and supply chain issues, resulting in the need for multiple COD extensions. In addition, AES doesn’t support SDG&E’s proposal to limit MMA requests to once every 12 months. Instead, CAISO should eliminate the need for certain changes to require an MMA, such as date and inverter changes. AES believes this can naturally eliminate the volume of MMA requests. Finally, AES does not support the CAISO’s initial consideration to withdraw a project that transfers its TPD allocation to another project.  As stated by Clearway on the August 1 working group, the offtaker often requires a certain bundle of attributes in projects in the PPA that would require developers to transfer TPD allocation within their own projects to fulfill the PPA requirements. At minimum, the CAISO should not deem projects withdrawn if TPD allocation transfers within the same developer’s projects.

[1] Presentation-Interconnection-Process-Enhancements-Track2-Working-Group-Jul242023.pdf (caiso.com), pp.10-18

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

1) Interconnection request intake

As stated in Question 1, AES believes its interconnection intake proposal can be complemented with other stakeholder proposals including Avantus, New Leaf, Intersect, and Vistra.

2) Queue management

The CAISO should consider the use of available technologies, such as grid-enhancing technologies, to enable greater transmission capacity for projects that have completed COD but are waiting on network upgrades. The planned capacity in each TPP zone may not be fully realized until years after a resource is connected. Technologies such as storage as transmission, dynamic line rating, topology optimization, power flow control, FACTS, and virtual power plants should be studied to improve the deliverability of a project that is waiting on the published transmission capacity in its TPP zone at the time of interconnection request to be realized.

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

1) Interconnection request intake

LSA – Advanced Technology into Interconnection Process

• Further suggestion: Reconsider previous CAISO IPE 2021 proposal/comments to standardize Substation/T-line names/voltage during IR submittal
  • E.g., electronic form with drop down menu of full list of CAISO controlled sub/lines
    • This will eliminate IRs on POIs that are not controlled by CAISO

AES – Annual Interconnection Overview Report

• Support including the following added suggestions during 08/01 discussion:
  • Buses that are behind ADNUs, and which ones (USE)
  • Information on open bay positions (LSA)
    • Substation expansions often add significant lead time and IF cost
• Further Suggestion
  • Provide IC any IF estimates that can be determined up front.
    • While CAISO PTO Unit Cost guide includes the full menu, it doesn’t provide labor overhead costs, and ICs may not always know which parts to include for estimates

Avantus – Optimization Evaluation/Feasible MW “LOS” (during study)

• Avantus wants to clarify that pertaining to previous proposals on LOS reform, the intention is for CAISO and PTOs to take one step further during study by providing appropriate information that help ICs and the respective cluster optimize MW size that will trigger less long lead and costly upgrades, thus producing better outlook on construction timeline and achievable ISD/COD. Please refer to further details explained under question 3.

Avantus further support the following proposals to assist in managing IR intake:

• NEE – Automation and standardization of Phase I Interconnection Study Process
• Regular IR application windows
• Locational data availability
• PTO (SDGE, SCE, PG&E) – Simplified Data Package, Use of generic models for IR Reviews, expanded Scoping Meetings.
• Avantus – Incorporating Binding Deliverability Studies into P1 and P2

2) Queue management

LSA – Group B/D TPD Retention Revisit

• Avantus agree that retention requirements are increasingly difficult due to the total amount of time ICs were given to market between TPD results and retention affidavit due date.
  • For example, in the 2022-2023 cycle, TPD results were made available as of April 2023. Should pre-C13 affidavits be due at the usual scheduled time in December, this left ICs <7 months to obtain shortlist or PPA.
  • Even if pre-C13 affidavits are due at the same time as C14 after C14PhII results are published, at the current schedule, ICs would only have ~2 extra months to meet retention requirements.
    • This is likely to result in more projects converting to EO, compounding the very problem that CAISO is trying to resolve.
  • Provided that some C13 projects may not come online until 2027+ pending upgrades, CAISO should clarify with LSEs if they are even in position to consider these projects in the near term.
• Avantus is open to considering TPD reforms akin to that proposed/supported by Clearway and Rev Renewables et al. to hold requiring PPA to retain deliverability allocation until 3 years (or some other reasonable timing threshold) before longest lead upgrade is expected to be in-service.

Option B Reform

• Should CAISO proceed with Option B Reforms, Avantus support proposals to cement in CAISO’s tariff that any ICs who elect to fund a portion or all the required ADNU would automatically receive FCDS.

LSA/Clearway/Gridwell – Streamlining of MMA Requests

• Strongly support automating/exempting MMAs where proposed change would be a mere record update on CAISO front (e.g., PPA COD change, Gen-tie routing)
• For MMAs requiring study/modeling and/or sign off from PTO, CAISO should consider giving more autonomy between IC and PTO to negotiate and only require that an MMA is submitted afterward for CAISO to log for record.
  • Can be declared in QSRs that negotiations are on-going and will submit MMA when PTO signs off
    • CAISO would approve MMA with PTO sign off
    • If this is not acceptable, CAISO should clarify incidences where MMAs that are acceptable to PTO and wouldn’t be acceptable to CAISO
  • To clarify, we oppose proposed restrictions on IC’s abilities to submit MMA as presented in slide 28 of Aug 1^st proposal.
    • Projects can encounter issues where certain PTO work cannot continue without finalized MMA
      • At the same time, CAISO has voiced concerns that MMA volume/frequency is constraining staff resource and affecting turnaround time.
      • This is a circular issue we believe can be addressed by our modified proposal as a comprehensive solution that enable project work to continue while reducing MMA volume to a manageable level.

Avantus/Clearway - LOS Reform (post study)

• Avantus appreciates CAISO considering proposal per initial comments and plans to move the ability to submit LOS up to 9 months before Initial Sync Date.
  • However, this adjustment is likely to only help projects that may be threatened by upgrade delays while falling short on giving ICs an opportunity to partially bring a project online where the longest and second longest upgrade have substantial lead time differences.
  • Continue to recommend considering allowing LOS 5-9 months before 2^nd or 3^rd longest lead upgrade expected in-service date.
    • For further details, please review our proposal under question 3.
  • Additionally, Avantus express support for Clearway’s proposal to allowing multiple LOS limits achievable in a given COD year e.g., X MW between Y and Z hours for A and B seasons

Gridwell/LSA/SDGE/Avantus/USE – Tax Holiday/One-Time or Cyclic conditional withdrawal

• Avantus support at minimum a one-time opportunity for sensible/strategic penalty free withdrawals subject to CAISO determination.
• Avantus further support a cyclic penalty free withdrawal scheme when queue conditions warrant the need (e.g., opposite of Appendix DD Section 3.10 Emergency Interconnection Process).
  • Akin to suspension and emergency processes established in GIDAP, this policy would be meant for preserving some flexibility to supplement primary policies.

Gridstor – Low/no penalty withdrawal due to PTO delays

• Avantus support for CAISO to allow low/no-penalty withdrawal if PTO delays IF/NU completion or increase cost estimates significantly (threshold TBD) after LGIA execution.
  • CAISO must consider that non-reimbursable IF costs increase post GIA are more impactful to the economics and outcome of projects which could lead to cascading withdrawals.
  • CAISO should further survey with PTOs on both NU and IF cost increase and time delays for projects that are “lingering in queue”.

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

1) Interconnection request intake

Higher Entry Fees & Deposits

• Any additional increase in fees and deposits will generally favor larger and better capitalized developers who can maintain a larger portfolio, thus reducing competition.
• FERC Order 2023 declined to adopt significantly higher fees and deposits as entry requirement, citing true cost of interconnection studies and importance for maintaining “just, reasonable, and not unduly discriminatory or preferential” policies.

Proposed daily penalties for failing to submit MMA to update schedule.

• CAISO and PTO already have authority under the LGIP and LGIA to issue deficiency and default notices demanding that all deficiencies are cured within specified amount of time.
• For all proposed penalties, the transmission provider is also generally obligated to explain how the penalties will be used and distributed.
• This creates unnecessary administrative burden to CAISO’s accounting department who are already facing immense backlog.

Avantus further express concerns on the following proposals:

• Capacity auctioning
• Scoring systems and or Commercial Viability Criteria (CVC) too early in the study process
• Limiting # and timing of MMA
  • Please refer to Avantus recommendation under Question 1 on modified proposal to help CAISO/PTO manage MMA traffic.

• “All or nothing” one-time withdrawal/tax holiday proposal
  • Please refer to Avantus recommendation under Question 1 for recommendations.

2) Queue management

Removal of Suspension Rights

• Avantus oppose any proposals that would remove or alter the ability for a project to request suspension of LGIA.
• Lack of usage due to CAISO’s unique RA structure is not an indication of the future, as there is an increasing amount of EO projects contemplating alternative business models where suspension could be a useful tool.
  • Rather than confining future projects to fit a framework that could become less relevant with time, CAISO should continue to keep all available tools to preserve flexibility.
• FERC Order 2023 paragraph 718 (page 473) under LGIA Deposits specifically stated, “In the event the interconnection customer requests suspension of the LGIA under article 5.16 of the LGIA…”, indicates FERC’s intention to retain IC’s ability to suspend.

Energy Only CVC

• Before CAISO implement CVC to EO, it is critical to review and provide data on the list of RNUs assigned to them that are PNUs for other projects.
• If most EO projects are shown not to have substantial impact, CAISO should re-consider the priority of this effort.

LOS Reform to 9 months before Initial Sync Date

• To reiterate, this adjustment is likely to only help projects that may be threatened by upgrade delays while falling short on giving ICs an opportunity to partially bring a project online when the longest and second longest lead upgrade have substantial timing differences.
  • Please refer to alternatives proposed under question 1 and 3.

TPD Transfer Limits

• Avantus acknowledge CAISO’s intent on withdrawing upstream projects that are transferring TPD is to prevent project upstream from transferring TPD downstream, then convert to EO to remain in queue.
• However, we oppose the proposal on the principle that not all transfers are for the full amount of TPD. Often, it is an active project looking to transfer what hasn't been procured.
  • An indirection solution could be for CAISO to implement Optimization Evaluation/Feasible MW “LOS” as proposed under Question 1 and 3, by recommending right sized projects earlier in the study process.

New 3^rd IFS Posting

• Avantus request further details on the proposed timing of the new 3^rd posting.
  • A due date two years from PhII study publication may conflict with 2^nd IFS posting for projects that park for 1 or 2 years awaiting TPD allocation.
  • Additionally, this timing is premature for projects with shorter construction time but are awaiting progress on longer lead PNUs.

Time in Queue Accountability

• Avantus disagree on CAISO's reasoning to hold projects accountable based on time in queue.
  • CAISO and PTO should, to the extent possible, assist and ensure projects who have impact on each other are moving through QM process as smoothly as possible as to not exacerbate withdrawals.
  • Holding projects accountable that do not impact others strictly based on their time in queue may be off base and have the potential to take away candidates for future procurement needs.

MMA/LOS Interaction

• Avantus express concerns on revising LOS timeframe as leverage to restrict IC’s ability to submit late stage MMAs.
  • This does not materially improve the existing LOS policy.
  • This also reduce flexibility for both processes that are key to project success.
    • Please refer to further comments described under “Streamlining of MMA Requests” under question 1.
• Many stakeholders have voiced the need to submit MMA, often at the request of PTOs due to necessary changes, some after COD.

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

1) Interconnection request intake

Avantus would like to propose reframing previous pre/in study horizon LOS reform proposal as part of PhI and PhII akin to SPP as “optimization evaluation”.

• As presented on Jul 11th, SPP’s current LOS framework provide valuable information for interconnection customers by including MW amount that can be brought online per requested COD, accompanied with the most limiting element.
• While SPP does not extend further advice amidst backlog clearing, CAISO could consider taking a step further by working with LSEs/PTOs to design and implement interconnection study optimization framework.
• Under this framework, CAISO would serve as the neutral party to advise on project adjustments (e.g., sizing & config) that best balance upgrade cost, construction lead time, in-service date, and resource procurement needs.
  • Ideally, this information would be made available to IC as early as possible in the study process, and best before LGIA negotiations begin.
• Example using SPP DISIS-2020-001 P1, Group 5 subcluster:
  1. In SPP’s DISIS-2020-001 P1 posting, LOS MW amounts are listed under “request” tab accompanied by most limiting element (if applicable).
  2. The MW amount indicates what can be brought online per IC requested COD.
  3. ICs in turn can use this information to downsize accordingly so that the most limiting element (and likely longest lead upgrade) may no longer be needed.
  4. Since intra-subcluster customers generally do not know each other’s identity, CAISO would serve as the default neutral party to provide non-preferential optimization advice.

2) Queue management

Post study, planning horizon LOS to remedy projects pending long lead upgrades:

• CAISO has indicated that LOS results beyond 9 months prior to initial sync date may not provide accurate information for IC.
  • Avantus understands this could be due to NERC definitions of time horizon.
• However, we continue to urge CAISO to reconsider any proposals that would be consistent to the principles CAISO established at the beginning of the CAISO IPE 2023 effort.
  • Specifically, we urge the CAISO to consider allowing ICs to submit LOS requests 5 – 9 months prior to 2^nd or 3^rd longest lead upgrade to inquire feasible amount that can be brought online sooner.
    • Rationale: Currently, Initial Sync Date is dictated by the longest lead upgrade assigned to a project to bring the full requested MW online. Reframing the concept of “initial sync” Using the 2^nd or 3^rd longest lead upgrade as the new construction timeline should not affect the accuracy of the LOS results.
• To move “lingering” projects in the queue that may be behind a long lead upgrade, CAISO could consider revising policies to enable the following example:

Example:

• LSE seeks 2027 COD projects.
• Candidate 400MW project has FCDS and COD 2030 due to Upgrade A at 72 months long lead upgrade, with next longest lead upgrade B at 36 months.
• IC submits Planning Horizon LOS to determine MW amount that can be brought online upon completion of Upgrade B
• If a substantial amount (e.g., 200 MW) can come online without Upgrade A, LSEs may proceed to procure 200 MW for 2027 COD.

Final Remarks:

Avantus urge the CAISO to benchmark any observable downstream procurement impact from entities that have implemented stringent queue entry requirements and subsequent ratepayer impacts. With California’s forward-looking clean energy policy goals, paired with increasing extreme weather events, competition in the interconnection queue should be viewed and leveraged as an advantage for the region. Additionally, FERC ultimately made the conscious decision in Order 2023 to adopt policies deemed most reasonable after reviewing extensive NOPR comments. Further, FERC repeatedly acknowledged the need for fair and balanced policies as to not set impossible barriers that stifle development. CAISO, along with the state of California, has been a long-time champion of policies that enabled a thriving clean energy industry while maintaining a reliable grid, setting a commendable national standard. It is critical that any policies CAISO choose to implement will not set a precedent that may lead to irreversible unintended consequences within and outside its footprint. Avantus appreciates CAISO’s consideration and look forward to continuing efforts toward a balanced interconnection framework.

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

The Bay Area Municipal Transmission group (BAMx)^[1] appreciates the opportunity to comment on the CAISO's 2023 Interconnection Process Enhancements (IPE) Track 2 working groups held on June 27, July 11, and July 24, 2023. BAMx notes that FERC has issued a Final Rule regarding “Improvements to Generator Interconnection Procedures and Agreements,” including addressing a first-ready, first-served cluster process.[2] The CAISO response to the FERC Fine Rule should be added to the CAISO stakeholder process.

BAMx endorses the extensive CAISO-led stakeholder process that is occurring. It concurs with the CAISO and most stakeholders that drastic actions are needed to solve the current problems created by the excess of proposed projects that is many times the capacity needed for California to meet its clean power goals. Several proposals, including those made by Pacific Gas and Electric (PG&E, Southern California Edison (SCE), San Diego Gas and Electric (SDG&E), and Clearway Energy Group, to expedite the cluster study process, such as using generic models and eliminating several study requirements need to be considered.[3]

BAMx emphasizes prioritizing and focusing on the CAISO’s generator interconnection review process.  The Load Serving Entities (LSEs), such as the members of BAMx, carry the obligation to procure resources to meet their obligation to serve their customers.  The CAISO process should prioritize interconnections where the LSEs have indicated a commercial interest and located in zones where transmission capacity exists or has been approved.  The CAISO’s prioritization should be done to provide efficient and cost-effective solutions for LSE procurement of resources on behalf of their customers. If criteria are developed for projects to be retained in clusters, the criteria of having a signed PPA should be the most important criteria, with LSA interest being the next most important.

Any mechanism that results in reducing or containing Transmission Access Charge (TAC) should also be a key criterion for interconnecting project prioritization. There are a considerable number of capacity/deliverability projects triggered by generation interconnections that are paid by the CAISO ratepayers.[4] Under the current process, to BAMx’s knowledge, there has not been a single interconnecting project that has chosen to self-fund the delivery network upgrade for its deliverability, that is, Option B. Almost all the projects have chosen Option A, thereby opting for Transmission Plan Based Deliverability (TPD). Several proposals presented in the working groups emphasized the “Option B” reforms that envisioned the interconnecting customers (ICs) opting for Option B under certain circumstances. Some such examples include those offered by the Large-Scale Solar Association (LSA) and Clearway Energy Group.[5] Rev Renewables proposed to allow the ICs a one-time chance to choose to self-build (Option B) and participate in the next TPD cycle with higher priority.[6] Vistra’s proposal includes transmission process changes to allow subscriptions to subsidize transmission costs.[7] BAMx supports the elements of these proposals where the ICs self-fund the needed transmission upgrades without reimbursement. BAMx recommends that such projects that volunteer to pay for required transmission upgrades should be allowed to proceed on a priority basis. BAMx also notes that all means of reducing the cost of required transmission upgrades should be investigated, including the use of Grid Enhancing Technologies as outlined in the FERC Final Rule.[8]

[1] BAMx consists of City of Palo Alto Utilities and City of Santa Clara, Silicon Valley Power.

[2] The Final Rule may be found here.

[3] July 11, 2023 Working Group meeting.

[4] Approximately thirty-four (34) such projects are currently “In-flight” as included in “Network-Upgrades-Generator-Interconnection-Jul252023.xlsx,” Transmission Development Forum, July 25, 2023.

[5] July 11, 2023 Working Group meeting.

[6] July 24, 2023 Working Group meeting.

[7] July 11, 2023 Working Group meeting.

[8] FERC Final Rule, p.19 and p. 1036, Docket No. RM22-14-000.

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

 No comments at this time.

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

 No comments at this time.

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the thoughtful and innovative proposals put forth by stakeholders in the Interconnection Process Enhancements (IPE) 2023 Track 2 working groups. CalCCA recognizes that the direction of the initiative will be impacted by the Federal Energy Regulatory Commission (FERC) Order 2023. As with the August 1, 2023 workshop and as directed by the California Independent System Operator (ISO), CalCCA focuses its comments on stakeholder proposals without attempting to conclude whether or not such proposals will be compliant with the FERC Order 2023. Making those conclusions will be an important next step in the process.

In summary, CalCCA makes the following recommendations:

• Data transparency and accessibility is an essential first step towards tightening the link between resource and transmission planning, procurement, and interconnection. The ISO should publicize the data points listed by the ISO in its August 1, 2023 presentation and the data points proposed by The AES Corporation (AES) in its Annual Interconnection Overview Report presented at the July 11, 2023 working group;
• If the ISO moves forward with its Concept 1 (a transmission zone-based or queue-wide constraint for accepting interconnection applications or studying select interconnection requests), CalCCA supports using AES’ proposed scoring point system as a starting point for developing a prioritization methodology;
• CalCCA supports the proposal put forth in Sonoma Clean Power’s (SCP’s) comments in Section 3, which outlines an election process that mimics the Remaining Import Capability (RIC) election process, where load-serving entities’ (LSEs’) influence is calibrated to load share;
• AES’ proposed “Resource Diversity” criteria should give points to high-capacity factor resources and long-lead time development resources; 
• The ISO should analyze the magnitude, locations, and durations of deliverability shortages flagged by stakeholders. Based on these findings, the ISO should then explore with the California Public Utilities Commission (CPUC) opportunities to improve the deliverability retention process and interim deliverability process to mitigate the potential impacts of lengthy transmission upgrades and network upgrades on project Commercial Operation Dates (CODs);
• CalCCA supports the ISO exercising its ability to remove projects from the queue if they cannot demonstrate progress toward development milestones;
• The ISO should further evaluate the process improvement proposals made by the IOUs and adopt them if they will ensure meaningful study results, increase process effectiveness, and reduce time and staff requirements;
• Using 1.5 as the overall ratio of total capacity to total need is likely too low to ensure competition among developers competing for contracts with LSEs. The ISO should study as much capacity as maintains the usefulness of the study results, but at least two to three times the available and planned transmission capacity;
• If the ISO increases study deposits, it should do so scaled based on project size to ensure study deposits are not a barrier to smaller developers and smaller projects; and
• The ISO should not pursue an auction mechanism. Other mechanisms, like those outlined in Section 1 below, should be used to determine which projects are most commercially ready.

Transparency:

Data transparency and accessibility is an essential first step towards tightening the link between resource and transmission planning, procurement, and interconnection. CalCCA supports regular reporting of information necessary for developers to make informed interconnection requests and for LSEs to use when they are evaluating prospective projects. Improving the availability and accessibility of available existing and planned interconnection capacity, transmission plan deliverability (TPD) allocations, upgrade costs, and other public queue data as early and often as feasible will reduce the amount of speculative interconnection requests submitted. Interconnection customers will not need to use the interconnection study process to gain information, as they will already have the information available to them necessary to align resource development with existing and planned transmission capacity.

The ISO should publicize the data points listed by the ISO in its August 1, 2023 presentation[1] and the data points proposed by AES in its Annual Interconnection Overview Report presented at the July 11, 2023 working group.[2] Middle River Power’s suggestion for a graphical user interface that publishes the amount of interconnection capacity available at points of interconnection in the ISO could be used to make this information easily accessible to interconnection customers and LSEs.[3]

Scoring Criteria:

If the ISO moves forward with its Concept 1 (a transmission zone-based or queue-wide constraint for accepting interconnection applications or studying select interconnection requests), CalCCA supports using AES’s proposed scoring point system as a starting point for developing a prioritization methodology.[4] It largely reflects the type of criteria LSEs use to evaluate potential resources to contract with.

AES’s scoring point system should be enhanced in two ways. First, determine how commercial readiness points are assigned through direct LSE input rather than PPA status. PPAs are typically signed after the interconnection agreement and full capacity deliverability status (FCDS) allocation for the reasons described in the deliverability section below. LSE interest through the assignment of points is more appropriate, especially if there is uncertainty around deliverability status, network upgrade costs, and network upgrade timelines at the time of point assignment. Therefore, commercial readiness points should be informed by LSEs assigning points to projects they are interested in. LSE interest would be informed by their own IRPs and preferences for technologies and locations. CalCCA supports the proposal put forth in SCP’s comments in section 3, which outlines an election process that mimics the RIC election process, where LSE’s influence is calibrated to load share.  SCP’s proposal recognizes that given the importance of deliverability, which may not be certain at the time of scoring, the best way to gauge contractability is to directly ask the LSEs rather than require demonstrations of PPAs.

Second, AES’ proposed “resource diversity” criteria would provide additional points to resources that achieve specific resource diversity goals of the state or meet other criteria. The resource diversity criteria should include points for high-capacity factor resources and long-lead time development resources that are necessary to meet decarbonization goals but will also take longer to develop after going through the interconnection study process. 

Additionally, CalCCA generally supports New Leaf Energy’s proposal to prioritize projects in local areas,[5] as it will assist in CCAs developing projects in their own communities and near load centers. However, in adopting this proposal, the ISO must recognize there are two ways to address local reliability needs: new resources in the local area and new transmission to relieve local area constraints. An assessment of the costs and feasibility of both solutions must be performed before assigning points to ensure the best alternatives are known in advance of pursuing one over the other.

Whether or not the ISO moves forward with scoring criteria to prioritize interconnection applications or studies, the TPD allocation process should be updated to align with the scoring criteria developed here, including using LSE interest rather than or in addition to the PPA requirement.

Deliverability:

Deliverability allocations are key indicators CCAs use to determine which projects to pursue PPAs with. Until they have certainty of a resource’s deliverability status, CCAs are largely unwilling to move forward with PPAs given the associated risk in doing so. CCAs require certainty around projects’ deliverability statuses because deliverability is required to count projects towards their IRP procurement orders and resource adequacy (RA) requirements. The ISO should pursue proposals that allow for upfront certainty of projects’ deliverability status, or network upgrade costs and timelines to obtain FCDS, to allow projects to remain viable and accelerate their development. 

Several stakeholders, including Clearway and LSA,[6] flagged that they anticipate a mid-term (2028-2030) gap in available deliverability to allocate to Cluster 14 projects driven by the amount of time it will take for upgrades to be completed. Because deliverability certainty is necessary for LSEs to move forward in the contracting process, this gap may result in projects exiting the queue until upgrades are complete, slowing down the much-needed deployment of new resources and creating additional strain on the already overwhelmed interconnection queue.

To address this issue, the ISO should first analyze the magnitude, locations, and durations of deliverability shortages. Based on these findings, the ISO should then explore with the CPUC opportunities to improve the deliverability retention process and interim deliverability process to mitigate the potential impacts of lengthy transmission upgrades and network upgrades on project CODs. Coordination with the CPUC is critical to ensure future procurement orders are designed so that LSEs and developers can be successful in bringing new resources online in compliance with the orders.

Enforcing Required Milestones:

Per the Generator Management Business Practice Manual Section 6.5.2.1, projects studied in the cluster study process must have CODs that do not exceed seven years from the date the Interconnection Request is received by the ISO. A cluster-study project seeking to remain in the queue beyond seven years must clearly demonstrate why it will take longer and that the circumstances for delay were beyond the control of the interconnection customer. Projects seeking deliverability must also demonstrate viability criteria.

Stakeholders point out that despite these requirements, there are many projects that remain in the queue beyond their planned CODs and beyond the seven-year threshold.[7] Some also ask questions about the ISO’s enforcement efforts for this rule[8] or recommend modifications to this process to penalize or remove projects from the queue after seven years if the project cannot demonstrate that it is meeting development milestones.[9]

CalCCA supports the ISO exercising its ability to remove projects from the queue if they cannot demonstrate progress toward development milestones. The milestones and timelines for removal will likely be dependent on technology. A full seven years from interconnection request and COD will likely be unnecessary for “first ready” projects that are not long-lead time, while long-lead time projects like geothermal and offshore wind will likely require more time between entering the queue and reaching COD. CalCCA supports the ISO ensuring projects are on track, and removing those that are not making progress, while recognizing the differences in technology and factors outside the control of the developer.

Study Process Improvements:

The IOUs propose several process improvements that would simplify the interconnection study process and reduce the required time and resources to complete study process. These process improvements would include simplifying the application package, using generic study inputs and/or past study results, and providing cost estimates/timelines using generic study results/past study results.[10] The ISO should further evaluate these proposals and adopt them if they will ensure meaningful study results, increase process effectiveness, and reduce time and staff requirements.

While simplifying the study process should remain the ISO’s primary focus in IPE, the ISO should also explore its ability to leverage automation and advancements in new technologies as suggested by stakeholders to determine if such measures can be used to speed up the existing study process.[11]

[1]             2023 Interconnection Process Enhancements Track 2 Working Group (Aug. 1, 2023) at 21: http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-Track-2-Aug12023.pdf.

[2]             AES Interconnection Intake Proposal (July 11, 2023) at 41-42: http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-2023-Track%202-Working-Group-Jul112023.pdf.

[3]             Middle River Power CAISO IPE 2023 Phase 2 Proposals (July 11, 2023) at 112-113: http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-2023-Track%202-Working-Group-Jul112023.pdf.

[4]             AES Interconnection Intake Proposal (July 11, 2023) at 43-44: http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-2023-Track%202-Working-Group-Jul112023.pdf.

[5]             New Leaf Energy, Prioritizing Local RA (July 11, 2023) at 52: http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-2023-Track%202-Working-Group-Jul112023.pdf.

[6]             Clearway Energy Group, Proposals: Interconnection Process Enhancements 2023 and LSA, 2023 IPE LSA Recommendations (July 11, 2023): http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-2023-Track%202-Working-Group-Jul112023.pdf.

[7]             Vistra, Interconnection Process Enhancements 2023 Working Group Meeting #3 (July 11, 2023) at 100: http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-2023-Track%202-Working-Group-Jul112023.pdf; and, Gridwell Consulting, IPE 2023 Working Group 4 Proposals (July 24, 2023) at 47: http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-Track2-Working-Group-Jul242023.pdf.

[8]             LSA, 2023 IPE, Track 2 LSA Recommendations: http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-Track2-Working-Group-Jul242023.pdf.

[9]             Vistra, Interconnection Process Enhancements 2023 Working Group Meeting #3 (July 11, 2023) at 101: http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-2023-Track%202-Working-Group-Jul112023.pdf

[10]           SDG&E IPE Proposal Summary at 119, SCE Proposal for Working Group Session 3 at 125-127, PG&E 2023 IPE Proposal (July 11, 2023):  http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-2023-Track%202-Working-Group-Jul112023.pdf.

[11]           NextEra, 2023 Interconnection Process Enhancements at 70: http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-2023-Track%202-Working-Group-Jul112023.pdf.

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

Restricting Competition

CalCCA cautions the ISO against proposals that restrict competition among developers competing for contracts with LSEs procuring new resources to meet procurement mandates and climate goals. If the ISO implements a transmission zone-based approach that limits the amount of interconnection requests based upon existing and planned transmission capacity, the ISO must ensure sufficient interconnection capacity is studied to maintain competition among developers.

Studying capacity up to 1.5X the available and planned transmission capacity is too limiting. The ISO plans the transmission system based on resource portfolios the CPUC projects will be needed to support reliability and policy goals. LSEs will ultimately need to procure capacity consistent with those plans. If the ISO only studies 1.5X the amount of capacity needed to support reliability and policy goals, LSEs would experience significantly reduced bids in their request for offers (RFOs) relative to their procurement needs. Past experience also shows that many projects do not ultimately proceed in the development process and may drop out after it submits its interconnection request but before the contracting process. While some projects may offer to multiple LSEs, multiple LSEs may have interest in the same project, too.

Using 1.5 as the overall ratio of total capacity to total need is likely too low to ensure competition among developers competing for contracts with LSEs. The ISO should study as much capacity as maintains the usefulness of the study results, but at least two to three times the available and planned transmission capacity.

CalCCA also cautions against increasing study deposits too much such that they favor larger developers and crowd out the smaller developers. If the ISO does increase study deposits, it should do so scaled based on project size to ensure study deposits are not a barrier to smaller developers and smaller projects.

Auction

The ISO indicates an auction could be used as a secondary step if necessary to further narrow down projects to study to some percentage above TPD per zone.[1] CalCCA recommends the ISO pursue other mechanisms, like those outlined in section 1 above, for determining which projects are most commercially ready. CalCCA is concerned that an auction would:

1. Result in increased costs to ratepayers because the costs associated with bidding into the auction will ultimately flow to them;
2. Result in the highest bidders being studied rather than the most ready being studied;
3. Incent speculative projects to enter the queue by creating a secondary market where those projects can sell their queue position later;
4. Limit competition among developers by favoring larger developers with deeper pockets over small developers.

[1]             2023 Interconnection Process Enhancements Track 2 Working Group (Aug. 1, 2023) at 21: http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-Track-2-Aug12023.pdf.

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

CalCCA has no additional comments at this time.

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

CPUC Staff recognize the urgent need for better integration of the interconnection process with the IRP process. The CPUC’s IRP process expects there is a need for over the interconnection of 70 GW of new resources in the coming decade. CPUC staff reiterates support for the CAISO’s overriding goal for utilizing the IPE process to make fundamental reforms to the interconnection intake process.  The paper and the proposals presented by stakeholders in the 7/11 IPE Workshop are a good start to what should be a very important opportunity to support the development of significant quantities of critically needed new clean energy resources.  

We recognize that the majority of the proposals brought before the ISO acknowledge issues that relate to a lack of integration with the IRP process.  However, most of the proposals discussed so far do not include significant proposals for better integration with the IRP process and do not seem to create a path to better synchronize the timeline for resources coming online with the procurement obligations identified in the IRP process. ?The CPUC staff is committed to working with the CAISO in the next phase of the initiative to determine opportunities to align the timing of interconnection processes with IRP planning and procurement processes.  

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

CPUC staff propose the following criteria to be considered when the ISO assesses stakeholder proposals and next steps:   

• Ensure adequate cost considerations are conducted to ensure proposals help reduce the costs of interconnection overall, rather than risk increasing costs to ratepayers.  

  • Staff recommend the CAISO develop estimated cost impacts of current practices relative to any future proposals. Proposers should have to demonstrate that proposals (especially those that suggest increases in costs as a barrier to entry such as the Nextera’s proposal to increase deposits based on project size and increased study deposits for network upgrades and interconnection facilities) be cost neutral or help lower overall cost to ratepayers. 

• Ensure viewpoints of a broad range of stakeholders is considered.  

  • Given that developers have been the dominant stakeholder in the IPE process, the ISO should ensure that a proposal equally considers the interests of other stakeholders, including retail providers, permitting agencies, and regulatory authorities.  

• Ratepayer-funded transmission facilitates development of new resources, but the ISO needs to ensure that the interconnection process for new resources supports access to least cost resources.  

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

As stated in our response to question 1, CPUC staff support efforts by the CAISO to undertake reform including options beyond the queue management improvements proposed by stakeholders.  

CPUC staff urge CAISO to consider additional broad concepts, including:    

• Establishing priority for projects supported by LSEs’ seeking to comply with CPUC procurement orders and other entities engaging in procurement activities required by local and state regulatory bodies.  

  • We urge CAISO to ensure that appropriate priority is given to the development needs of LSEs and other entities which engage in procurement activities required by local and state regulatory bodies. In developing criteria for interconnection and interconnection studies CAISO staff should align the process and the projects that advance through the process with the priorities of LSEs and their procurement efforts.   

  • For example, the MMA process and limited operations study process should be linked with the needs of procurement, e.g., projects with LGIAs that are needed for meeting procurement obligations should have an ability to progress through the later part of interconnection with relative ease. 

• Establishing priority for projects that can be interconnected at least cost. 

• Efforts to publish which upgrades at what costs are needed for projects with signed LGIAs to provide transparency in the ratepayer funded transmission elements that are supporting generation interconnection requests.  

• Efforts to remove projects from the queue that do not meet milestones for project development – especially those without procurement contracts. 

• Efforts to prioritize projects needed to meet Local Reliability and reduce the cost of compliance with Local Resource Adequacy requirements.   

  • CPUC staff support the CAISO taking strong consideration of proposals that better enable new resources that would support or improve local reliability to interconnect in local constrained transmission areas. 

• Efforts to reduce overall timelines of interconnection and reduce the ‘logjam’ impression of interconnection. The interconnection queue process should attract developers who can bring generation projects to fruition at least cost in a timely manner for Californians. Currently, the process frustrates almost all involved – yet many projects are able to come online each year.   

  • CPUC staff support working on proposals that enhance information, process improvements, transparency, and other similar efforts to eliminate the impression and reality that interconnection processes are not working to support the transformation of the grid to clean energy consistent with SB 100 goals.  

• Continuing to look for ways to improve interim deliverability allocation to ensure existing deliverability is being utilized as much as possible. 

  • Permitting interim deliverability to be utilized for longer duration beyond the current 1-year limit, if possible, would be a useful improvement. 

  • Permitting changes to deliverability allocation processes, if the benefit to cost of policy changes can significantly reduce the cost of transmission needed to interconnect large quantities of new resources. 

• Increasing the transparency of information throughout the interconnection process. Any proposal should increase the availability of information on the projects in the queue and their status as well as on the transmission system. Some specific CPUC staff recommendations of additional information to make public as part of the interconnection process not mentioned in the various proposals include: 

  • Requiring CAISO to identify the name of the entity (including parent entity) that holds each queue position that will utilize ratepayer funded transmission.  

  • Establish a process to update the interconnecting project’s key information such as contracting status, permitting status, phasing status, etc. to better align with statewide resource development tracking. Having CAISO require interconnection queue positions identify their CEQA state clearinghouse reference number (or numbers) for the CEQA document associated with the project for which they hold a queue position.  There should be a clear milestone that a queue number has applied for and received to have a valid development permit from a lead agency by a fixed amount of time. 

  • Having PTOs that sign interconnection agreements with developers and CAISO give public reports quarterly on their ability to achieve the PTO upgrades identified in any and all queue positions with signed interconnection agreements. 

  • Establishing a clear process for the project to update quarterly on their expected COD for all phases of projects in the queue. Remove projects from the queue if the updates and development milestones are not met.  

• Expiring TPD Allocation if unutilized  

  • CPUC staff generally supports having more strict milestones and timelines for remaining in the queue. 

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

No comment at this time.

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

No comment at this time.

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

The Public Advocates Office at the California Public Utilities Commission (Cal Advocates) is the state-appointed independent ratepayer advocate at the California Public Utilities Commission (CPUC). We advocate for affordable, safe, and reliable utility services consistent with the state’s environmental goals. [1]

Cal Advocates appreciates CAISO staff’s efforts to improve the generation interconnection process.  CAISO states the purpose of the IPE 2023 initiative is to implement reforms to the Generator Interconnection and Deliverability Allocation Procedures (GIDAP) and reduce barriers to efficient and timely resource development to achieve California's reliability and Senate Bill (SB) 100 policy goals in a cost-effective manner. 

Further, in its IPE Track 2 Discussion Paper, CAISO identifies two fundamental challenges associated with managing the current interconnection process including (1) Intake of new interconnection requests and (2) Management of outstanding interconnection requests.

Cal Advocates appreciates all the stakeholder proposals, presentations, discussion on proposals.  Though after considering the CAISO Discussion Paper options and stakeholder proposals, Cal Advocates submits its own proposal to the CAISO and Stakeholders for consideration on this important matter.

The attached Public Advocates Office Generation Interconnection Enhancements Proposal prioritizes a cost-effective, streamlined transmission interconnection process that would help the State achieve its renewable energy and greenhouse gas reduction goals. 

[1] Pub. Util. Code, § 309.5.

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

1) Interconnection request intake

CalWEA continues to support its ”Proposal to Effectively Address the Queue Overload While Preserving Open Access, Competition, and Resource Diversity” as presented at the July 11, 2023, workshop (updated on July 20, 2023).  To expound on that presentation:

1. No artificial limit should be placed on the number, size, or location of submitted interconnection applications – most such applications are likely to follow CAISO’s recommended interconnection zones anyway.  CAISO could increase interconnection application study fees or site exclusivity deposits as a measure to prevent what it considers “frivolous” interconnection applications –  particularly for developers that submit an excessive number of applications.
2. All projects entering a queue cluster should be eligible for a scoping meeting and receive needed preliminary information on their interconnection requirements so that they can determine whether it would make sense to withdraw from the queue before Phase 1 studies begin. 
3. For its Phase 1 study, CAISO (and its PTOs) should study a volume of generation interconnection capacity in each of the study zones in which interconnection applications have entered the Phase 1 study process, rather than studying all the queued generation. The study can be done similarly to how CAISO conducts TPP studies for policy upgrades.    The formula for the generation volume and its mapping to various busbars in a study zone should reflect the latest total IRP capacity for that zone as well the size and location of interconnection applications submitted for that zone in the queue being studied. The algorithm can be discussed and determined later. 
4. The CAISO Phase 1 study should therefore produce reasonable interconnection requirements, including cost and timelines, for each study zone.  These costs and timelines should be assigned as a proxy to all projects in each study zone according to a formula to be worked out later.
5. The proxy interconnection requirements (cost and timeline) assigned by CAISO to projects studied in Phase 1 would be shared with all interested offtakers (e.g., LSEs) for consideration.  Offtakers would then be encouraged to directly, or via the project, share their interest in studied projects with CAISO.  CAISO would use such input as one of several measures to determine the commercial viability of projects studied in Phase 1 included in the formula for scoring commercial viability.  This project viability scoring process  would require that the time between Phase 1 and Phase 2 studies be extended beyond the current 90-day period to potentially a 6-month period.
6. CAISO would allow projects with a commercial viability score higher than a certain threshold to enter Phase 2 studies subject to those projects posting their IFS based on their proxy interconnection costs.  IFS postings will be subject to the same calculation and forfeiture rules as are applicable today.  All location-constrained resources should be exempt from any scoring mechanism that involves project locations based on CAISO-selected study zones.
7. The projects that do not qualify to enter Phase 2 studies based on their commercial viability score would be withdrawn from the queue unless they are willing to post a non-refundable IFS deposit based on their full proxy interconnection cost.
8. CAISO would perform Phase 2 studies using its existing protocols based on the projects that enter Phase 2 studies.

2) Queue management

To address CAISO’s shortage of resources, both in terms of skilled human resources and creative solutions, to “administratively” manage the onslaught of resources seeking to connect to the grid in a reliable and timely fashion, CAISO should hire more staff, employ consulting services, and develop innovative technical methods and tools. (One such method was suggested by SCE whereby the detailed verification of inverters would be delayed to much later in the interconnection process.)  These simple solutions are particularly feasible given that the interconnection customers will bear the full cost of any solution(s) that CAISO adopts for processing and studying queued interconnection applications.

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

1) Interconnection request intake

CalWEA is concerned that the CAISO’s proposals do not comport with the overarching imperative (noted in CAISO’s June 23, 2023 paper) that CAISO continue to ensure open access and avoid discriminatory or preferential treatment.  Most of the reforms proposed by CAISO would limit the number and scope of interconnection applications even before the interconnection process starts.  Such principles are contrary to FERC’s open access principles and would also severely limit the current supply competition that enables Load Serving Entities the opportunity to select from a large variety of resources at competitive prices in meeting their short- and long-term clean energy and reliability goals, to the benefit of electricity customers. 

In addition, we are concerned that the CAISO’s proposals will fail to meet the principle that reforms should “enhance the interconnection process’s ability to support the procurement necessary to meet California Public Utilities Commission (CPUC) resource portfolios and California Energy Commission (CEC) SB 100 portfolios, and portfolios established by non-CPUC jurisdictional LRAs.” Specifically, we find CAISO’s proposed solutions to be discriminatory against “location-specific resources.”  For example, CAISO would study projects with higher priority in part based on its preferred locations developed by the new transmission upgrades recently approved by its board. Fitting into those locations works for technologies and resources that are site-flexible – primarily solar, storage and combinations of the two, which now dominate the queue.  It does not work well for location-constrained resources, such as wind, offshore wind, geothermal and certain types of long-duration storage resources (e.g., pumped storage).  These resources generally require considerable due diligence prior to entering the queue, which accounts in part for why they are a small portion of the queue. Therefore, as noted above, all location-constrained resources should be exempt from any scoring mechanism that involves project locations based on CAISO-selected study zones.

2) Queue management

CalWEA believes that the Queue Management Initiative should be completely reconsidered.

The specific measures suggested by Queue Management for managing the projects that have already completed their studies imply that such projects stay in the queue and request MMAs for frivolous reasons rather than to address real business needs as developers seek to advance their projects.  And the solutions offered by QM appear to be intended to limit the activity of such projects simply to reduce the workload on CAISO and PTO staff as opposed to innovatively solve the real problems that real projects are facing.  For example, measures such as limiting the lifetime of a project in the queue to seven or 10 years from the date of interconnection application seems to forget that transmission upgrades identified as part of interconnection studies these days often require construction periods that far exceed 5 years (sometimes as long as 10 years), and that construction would at best start three or more years after the interconnection application has been accepted by the CAISO. 

In short, CalWEA finds queue management reforms to be distracting and recommends that all QM proposals be reconsidered as part of a proceeding separate from the 2023 IPE.  

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

No further comments at this time.

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

Interconnection request intake:

• No limit should be placed on the number, size or location of the submitted interconnection applications (CalWEA)
• Supplementation of initial project study list (LSA)
• Scoring/readiness criteria (AES, Intersect, NextEra)
  • Clearway supports using an upfront scoring process only if it is used for the purpose of arriving at meaningful results, i.e., to narrow down the MW to be studied if there are many more MW of generation in queue than MW of planned transmission capacity in a particular area. Clearway opposes any proposal to use scoring/readiness criteria to limit initial queue entry.
• Automation and standardization of Phase I interconnection study process (SDG&E, SCE, PG&E, LSA, NextEra)
  • Clearway supports proposals from the PTOs and others to simplify the data required and analysis performed at the Interconnection Request phase. Reducing upfront workload will make it feasible to process the volume of applications that are needed to keep pace with California’s need for new resources.
• Study phase revisions (SDG&E, SCE, PG&E)
• Establish goals for PTOs for completing interconnections and increasing resources available for completing studies and upgrades (Gridstor)

Queue management:

• Resolve Cluster 14 TPD timing and retention rules issue (Clearway, LSA)
• Contractable assurance of interim deliverability (Clearway)
• Simplify MMA process (Vistra, Clearway, Gridwell)
• LOS improvements (Avantus, Clearway)
  • In addition to Clearway’s proposal to not create interdependencies between MMA and LOS, Clearway supports the proposal by Avantus to build LOS into Phase I or Phase II studies and allow projects to submit LOS requests 2 years before COD.
• Require PTO to start planning for all upgrades required for a project to attain FCDS as soon as developer provides NTP (REV)
• TPD Option B reform: if the IC does not receive Option A TPD allocation in the first year, then allow the IC a one-time chance to choose to self-build (Option B) and participate in the next TPD cycle with a higher priority (REV)
• Allow one-time penalty free ability to exit queue (LSA, NextEra, CAISO).
  • Clearway supports the penalty-free withdrawal without increasing IC cost responsibility.
• Conditionally support requiring Energy Only projects to demonstrate commercial viability criteria.
  • Clearway believes that EO projects that don’t withdraw with a one-time penalty-free withdrawal could be required to securitize the upgrades for which they are responsible.

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

Interconnection request intake:

• Increase in entry fee and study deposit and higher deposits for network upgrade and interconnection fees (CAISO, NextEra)
  • Clearway recommends not going beyond what FERC Order 2023 requires on this front. Excessive upfront fees and deposits would result in reduced competition in the market, favoring developers with the lowest cost of capital rather than the most thoughtfully developed projects.
• Site exclusivity required to enter the queue (NextEra, SDG&E)
  • Similarly, this proposal will result in reduced competition by favoring larger developers. Clearway recommends not going beyond what FERC Order 2023 requires on this front.
• Limit number of projects and capacity sufficiently to enable meaningful and efficient single-phase study process (CAISO)
  • As discussed above under “Scoring/readiness criteria,” Clearway supports exploring a methodology to not study all projects to enable a meaningful and efficient study process. However, Clearway opposes any proposal to place a cap on the total number of MW or number of projects entering the interconnection queue.
• Auction capacity available (Shell/Savion)
  • Allocating capacity via auction rewards developers with a low cost of capital rather than alignment with the transmission plan or other policy objectives. Auctions also drive up the total cost of project development, increasing the ultimate cost to ratepayers. Recent examples of federal auctions for offshore wind leases show that auctioning scarce project development opportunities can lead to very high prices that presumably must be recouped through energy prices or state support ($4.37 billion for six leases in New York, $315 million for two leases in the Carolinas, $757 million for five leases in California).  

Queue management:

• Removal of suspension rights (CAISO)
• TPD transfer limitations (CAISO)
  • Clearway has seen examples where it was necessary to transfer all or a portion of deliverability from one queue position to another within a complex of projects at the same POI, to meet contractual arrangements with multiple offtakers. CAISO’s proposal to require a project transferring TPD to another project to withdraw would create issues for such commercial arrangements.
• If MMA required to modify milestones due to IC delay, then IC has 10 BD to submit the MMA request or is penalized $1,500/day (CAISO)
• Limit the number of MMA requests to no more than once every 12 months
  • On many occasions, MMA requests are triggered by construction contracts, financing timelines and offtake contract timelines. Getting a modification approved by CAISO can be a critical milestone in project financing agreements. These requirements can push developers to submit multiple MMAs at times that are not pre-decided. Limiting the ability of developers to submit MMAs will risk the viability of well-positioned contracted projects.
• MMAs must be valid prior to LOS study start (CAISO)
  • There are occasions when the project requires an MMA to finalize the facility’s design basis, equipment selection and amended LGIA to support project financing during the 6-month window when the interconnection customer is first allowed to request an LOS report. Limiting when an LOS can be requested impacts how quickly certain projects can be placed in-service.
• Add 4th financial posting at 2 years after study results (CAISO)
  • Under the current TPD rules, adding an additional IFS posting requirement after the first TPD allocation cycle would negatively impact projects that are not allocated the requested capacity. Under this proposal projects that decide to park and remain active would be obligated to increase their at-risk posting amount prior to issuing NTP, despite having no additional certainty about deliverability.  
• Viability criteria and time in queue (CAISO)

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

No additional comments at this time.

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

EDF-R is grateful for the opportunity to provide comments on the 2023 Interconnection Process Enhancements Track 2 discussion paper and work groups. We commend CAISO for including the working group in the IPE process and urge them to seriously consider the recommendations that stakeholders have reached broad support on.

Regarding interconnection request intake, there is a broad stakeholder support on the following points:

• The necessity for CAISO to offer accessible and comprehensible data for developers to use when identifying suitable sites for interconnection requests.
• The need for CAISO to increase barriers to enter the queue.
• The importance of devising a scoring methodology to evaluate which projects should be allowed to enter the queue, with priority given to:
  • Site exclusivity.
  • Expansions of existing facilities and sites.
  • Commercial readiness (including Power Purchase Agreement (PPA) status or endorsement from other Load-Serving Entities (LSE)).
  • Permit readiness.
  • The necessity of providing an option for interconnection customers to make a substantial commitment to transmission funding in exchange for a certain Transmission Plan Development (TPD) allocation. This concept has been discussed as a "subscription" model and as Option B revisions, but the underlying goal of these proposals remains the same.
  • The importance of opening the interconnection request window annually to prevent creating an environment where opportunities for interconnection applications are limited.
  • The need to shorten the study timeline to facilitate expedited progression of projects towards Generator Interconnection Agreement (GIA) execution, construction and Commercial Operation Dates (CODs).

For queue management there is broad stakeholder consensus on the following points:

• Implementing a one-time opportunity for projects in the interconnection queue to exit the queue, being responsible only for costs that have been incurred or are irrevocably committed. This exemption would alleviate them from forfeit penalties that would typically apply.
• Expanding the list of changes that do not necessitate Material Modification Assessment (MMA) requests, beyond what CAISO has currently proposed.
• Enhancing transparency of information within the queue, particularly with regard to projects that are partially online.
• Requiring milestone updates for every project that exceeds its scheduled dates, and ensuring equitable enforcement of Generator Interconnection Agreement (GIA) milestones, including timely commencement of construction on network upgrades and submission of PTO delay notices.
• Maintaining MMA and Letter of Status (LOS) as independent processes: Given that CAISO approves most MMAs, there is no rationale for impeding the LOS process. Developers can assume the risk of failure - if an MMA application fails, the LOS becomes inconsequential.
• Establishing an improved framework for evaluating project viability.

EDF-R suggests that the framework for assessing commercial viability should encompass:

• Negotiation and execution of a GIA (CAISO already possesses the authority to withdraw due to failure in negotiation).
• Posting of a third financial security (bringing the total security to 100%).
• Provision of written notice to proceed on network upgrades.
• Fulfillment of all payment obligations.
• Submission of evidence of participation in the Request for Offer (RFO) process.
• Submission of tangible evidence of site exclusivity (recognizing that some legacy projects still utilize deposits in lieu).
• Achievement of commercial operation for a portion of the total megawatt capacity.

MMA inverter changes

EDF-R also requests that CAISO consider incorporating inverter changes into its proposal to modify the MMA process. At the time of interconnection request submission, an interconnection customer cannot definitively determine the type, quantity, and size of inverters needed for a project due to the rapid pace of technological change. Additionally, all inverter changes are ultimately approved by the CAISO. While EDF-R acknowledges the significance of collecting detailed technical data, including inverter data, for CAISO, this need not be conducted during the Interconnection Request (IR) process or the MMA process. Inverter data could be established as a milestone in the GIA that projects must achieve or during a suitable phase of the study process when data collection aligns with operational studies.

EDF-R wholeheartedly endorses Clearway’s proposal to enhance TPD Allocation process and the interim deliverability process, augmenting the amount and duration of Interim Deliverability Status (IDS) allocations.

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

1. Interconnection request intake

Auction mechanism

EDF-R expresses significant concern regarding CAISO's proposal to incorporate an auction mechanism as part of the allocation process for interconnection capacity and deliverability. This concept must be meticulously developed to mitigate potential unforeseen consequences. A widespread consensus among stakeholders deems an auction mechanism as imprudent and potentially anticompetitive.

Furthermore, CAISO has not furnished any specifics about the proposed mechanism, including:

• How auction revenues would be allocated.
• What control mechanisms CAISO intends to establish to prevent any single entity from exerting undue market power. There is a genuine concern that a single company could manipulate supply levels to inflate auction prices in a simplistic auction system.
• Whether the auction would favor the highest bidder or utilize a clearing price mechanism.
• Whether auction winners would be allowed to transfer or sell awarded deliverability to other entities.
• Whether penalties would be imposed on auction winners failing to produce the allocated resource in a timely manner.
• How resource attributes would be factored into the auction process to ensure a diverse resource portfolio.

Transmission zone limits

Concerning queue entry criteria, EDF-R is apprehensive that Transmission Interconnection Zone limits could unduly exclude interconnection requests in specific areas. This approach assumes the flawless accuracy of the CPUC busbar mapping process. While Transmission Interconnection Zone criteria could be one facet of a multifaceted evaluation, it should not function as an absolute filter prohibiting requests in certain locations.

MW limitations in study areas

EDF-R also contends that it is logical for CAISO to limit the study of MW capacities based on the level of existing and planned capacity within a zone but emphasizes that no zone should have zero MW. EDF-R anticipates discussing the merits of appropriate study thresholds, suggesting that a factor of 1.5x may not adequately ensure competitive outcomes.

TPD allocation priority

EDF-R also rejects the notion of awarding Transmission Plan Development (TPD) allocations solely to the "first projects with PPAs." Such an approach could create a scenario where a project securing a PPA a day ahead of another, or providing proof of a PPA via email just minutes before another project, determines whether an allocation is granted. This could lead to chaotic and potentially suboptimal outcomes, with parties rushing to finalize contracts and increasing the likelihood of costly errors borne by ratepayers.

Locational Capacity Requirements (LCR) and or Local RA

The proposal to consider LCR and or Local RA, with potentially more points for Local RA Areas, conflicts with the First Principle and is inconsistent with facilitating the building of new and expanded generating facilities and associated upgrades.

• First, the CAISO’s annual LCT Study is intended to address “temporal local reliability needs”. An excerpt from the 2028 LCT Study^[1] is below:
  • “To aide procurement, this LCT study provides load profiles and transmission capacity information that shows the effectiveness of local resources in meeting temporal local reliability needs.”
• Second, CPUC’s Local RA Obligation[2] is a three year forward obligation with each LSE required to demonstrate procurement of 100% of Local RA obligation for each month of compliance years one and two and 50% of Local RA obligation for year three.
• Lastly, beginning with new deliverability allocations this Fall,^[3] “the CAISO proposes to clarify that for an interconnection customer representing it has, is negotiating, or is shortlisted for a power purchase agreement, the agreement must meet certain term and counterparty criteria. First, either the agreement must have a term of no less than five years, or the customer must have multiple agreements whose combined terms are no less than five years.^[4] Although developers sometimes may enter into short-term contracts for resource adequacy capacity or renewable energy credits, there was no evidence in the (previous) IPE initiative that these contracts would secure the necessary long-term financing necessary for greenfield generation projects or expansions.”^[5]

PTO Obligation

Should CAISO proceed with the queue management principle that Generator Interconnection Agreements (GIAs) and subsequent modification outcomes establish specific Notice to Proceed (NTP) dates, any such implementation must be coupled with a requirement for the Participating Transmission Owner (PTO) Interconnection to initiate engineering, procurement, and construction on the necessary upgrades if NTP is received by the specified date.

[1] http://www.caiso.com/InitiativeDocuments/Final-2028-Long-Term-Local-Capacity-Technical-Report.pdf

[2] https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/electric-power-procurement/resource-adequacy-homepage

[3] Section 8.9.3 of Appendix DD to the CAISO tariff.

[4] Short-term contracts generally go to generation that is already online.

[5] http://www.caiso.com/Documents/Jan26-2023-TariffAmendment-InterconnectionProcessEnhancements-Phase2-ER23-941.pdf

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

EDF-R observes that the 2023 IPE initiative may need an additional track: Track 2 being for changes that will apply to cluster 15, and changes for future clusters. These tracks could run in parallel but be filed in separate filings to the FERC, and this would allow CAISO additional time to address more complex items if needed. 

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

EDF-R is grateful for the opportunity to provide comments on the 2023 Interconnection Process Enhancements Track 2 discussion paper and work groups. We commend CAISO for including the working group in the IPE process and urge them to seriously consider the recommendations that stakeholders have reached a consensus on.

Regarding interconnection request intake and the study process, there is a broad stakeholder consensus on the following points:

• The necessity for CAISO to offer accessible and comprehensible data for developers to use when identifying suitable sites for interconnection requests, including but not limited to Annual Interconnection Overview Report, information on capacity available, proxy cost and duration for projects provided in phase I results publicly for each zone to inform LSE consideration of potential interest. This information is critical to ensure data driven interconnection requests and GIDAP outcomes.
• The importance of opening the interconnection request window annually to prevent creating an environment where opportunities for interconnection applications are limited.
• The need for CAISO to increase barriers to enter the queue.
• The importance of devising a scoring methodology to evaluate which projects should be allowed to enter the queue, with priority given to:
  • Interconnection requests that can fulfill Locational Capacity Requirements (LCR), with potentially more points for areas with higher demand.
  • Genuine site exclusivity.
  • Expansions of existing facilities and sites.
  • Commercial readiness (including Power Purchase Agreement (PPA) status or endorsement from other Load-Serving Entities (LSE)).
  • Permit readiness.
  • Interconnection requests that meet specific resource diversity goals of the state or align with other criteria from AIOR's rubric.
• The necessity of providing an option for stakeholders to make a substantial commitment to transmission funding in exchange for a certain Transmission Plan Development (TPD) allocation. This concept has been discussed as a "subscription" model and as Option B revisions, but the underlying goal of these proposals remains the same.
• The need to shorten the study timeline to facilitate expedited progression of projects towards contract execution, construction and Commercial Operation Dates (CODs). This can be accomplished by both reducing study timelines and approving and construction of network upgrades on a shorter timeline.
• Integrate and reform IRP, TPP, and GIDAP to approve and construct new transmission earlier that will facilitate increasing TPD availability to facilitate new resource interconnections to meet state plans and commercial plans. CAISO study process should incentivize CAISO to propose larger scale projects as early in the process as possible (such as in response to a sensitivity case result), rather than waiting for a particular procedural date.

For queue management there is broad stakeholder consensus on the following points:

• Implementing a one-time opportunity for projects in the interconnection queue to exit the queue, being responsible only for costs that have been incurred or are irrevocably committed. This exemption would alleviate them from forfeit penalties that would typically apply.
• Expanding the list of changes that do not necessitate Material Modification Assessment (MMA) requests, beyond what CAISO has currently proposed.
• Enhancing transparency of information within the queue, particularly with regard to projects that are partially online.
• Requiring milestone updates for every project that exceeds its scheduled dates, and ensuring equitable enforcement of Generator Interconnection Agreement (GIA) milestones, including timely commencement of construction on network upgrades and submission of PTO delay notices.
• Maintaining MMA and Letter of Status (LOS) as independent processes: Given that CAISO approves most MMAs, there is no rationale for impeding the LOS process. Developers can assume the risk of failure - if an MMA application fails, the LOS becomes inconsequential.
• Expanding LOS methodology should to provide for results that outline multiple operating limits achievable in a given COD year instead of a single extremely conservating limitation that stretches across months in case of delayed RNUs. For example, a limit to X# MW between15:00 and 20:00.
• Establishing an improved framework for evaluating project viability.

EDF-R suggests that the framework for assessing commercial viability should encompass:

• Negotiation and execution of a Generator Interconnection Agreement (GIA) (CAISO already possesses the authority to withdraw due to failure in negotiation).
• Posting of a third financial security (bringing the total security to 100%).
• Provision of written notice to proceed on network upgrades.
• Fulfillment of all payment obligations for work.
• Submission of evidence of participation in the Request for Offer (RFO) process.
• Submission of tangible evidence of site exclusivity (recognizing that some legacy projects still utilize deposits in lieu).
• Achievement of commercial operation for a portion of the total megawatt capacity.

MMA inverter changes

EDF-R also requests that CAISO consider incorporating inverter changes into its proposal to modify the MMA process. At the time of interconnection request submission, an interconnection customer cannot definitively determine the type, quantity, and size of inverters needed for a project due to the rapid pace of technological change. Additionally, all inverter changes are ultimately approved by the CAISO. While EDF-R acknowledges the significance of collecting detailed technical data, including inverter data, for CAISO, this need not be conducted during the Interconnection Request (IR) process or the MMA process. Inverter data could be established as a milestone in the GIA that projects must achieve or during a suitable phase of the study process when data collection aligns with operational studies.

Interim Deliverability

EDF-R strongly endorses the proposal to enhance the interim deliverability process, augmenting the amount and duration of Interim Deliverability Status (IDS) allocations.

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

Auction mechanism

EDF-R expresses significant concern regarding CAISO's proposal to incorporate an auction mechanism as part of the allocation process for interconnection capacity and deliverability. If considered for development and implementation, this concept must be meticulously developed to mitigate potential unforeseen consequences. A widespread consensus among stakeholders deems an auction mechanism as imprudent and potentially anticompetitive.

Furthermore, CAISO has not furnished any specifics about the proposed mechanism, including:

• How auction revenues would be allocated.
• What control mechanisms CAISO intends to establish to prevent any single entity from exerting undue market power. There is a genuine concern that a single company could manipulate supply levels to inflate auction prices in a simplistic auction system.
• Whether the auction would favor the highest bidder or utilize a clearing price mechanism.
• Whether auction winners would be allowed to transfer or sell awarded deliverability to other entities.
• Whether penalties would be imposed on auction winners failing to produce the allocated resource in a timely manner.
• How resource attributes would be factored into the auction process to ensure a diverse resource portfolio.

Transmission zone limits

Concerning queue entry criteria, EDF-R is apprehensive that Transmission Zone limits could unduly exclude interconnection requests in specific areas. This approach assumes the flawless accuracy of the CPUC busbar mapping process. While Transmission Zone/LCR area criteria could be one facet of a multifaceted evaluation, it should not function as an absolute filter prohibiting requests in certain locations.

MW limitations in study areas

EDF-R also contends that it is logical for CAISO to limit the study of MW capacities based on the level of existing and planned capacity within a zone but emphasizes that no zone should have zero MW. EDF-R anticipates discussing the merits of appropriate study thresholds, suggesting that a factor of 1.5x may not adequately ensure competitive outcomes.

TPD allocation priority

EDF-R also rejects the notion of awarding Transmission Plan Development (TPD) allocations solely to the "first projects with PPAs." Such an approach could create a scenario where a project securing a PPA a day ahead of another, or providing proof of a PPA via email just minutes before another project, determines whether an allocation is granted. This could lead to chaotic and potentially suboptimal outcomes, with parties rushing to finalize contracts and increasing the likelihood of costly errors borne by ratepayers.

PTO Obligation to Construct

Should CAISO proceed with the queue management principle that Generator Interconnection Agreements (GIAs) and subsequent modification outcomes establish specific Notice to Proceed (NTP) dates, any such implementation must be coupled with a requirement for the Participating Transmission Owner (PTO) to initiate engineering, procurement, and construction on the necessary upgrades if NTP is received by the specified date.

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

EDF-R observes that the 2023 IPE initiative may need an additional track: Track 2 being for changes that will apply to cluster 15, and changes for future clusters. These tracks could run in parallel but be filed in separate filings to the FERC, and this would allow CAISO additional time to address more complex items if needed. 

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

EDP Renewables (EDPR) appreciates the significant work that the California Independent System Operator (CAISO) and stakeholders have put into the Interconnection Process Enhancements (IPE) Track 2 working groups and discussions over the last three months. EDPR encourages CAISO to explore and consider all the stakeholder proposals presented at the working groups to develop a comprehensive Straw Proposal that can meaningfully address this complex and challenging issue. We offer these high-level comments for consideration while drafting the straw proposal and look forward to additional opportunities to evaluate and provide feedback on the Straw Proposal.

A) Interconnection Request Intake

A1) Data Accessibility and Submittal Packages

EDPR encourages the CAISO to continue developing the concepts and stakeholder proposals related to providing additional data to developers prior to submitting an interconnection request. Empowering developers with more granular information earlier on in the process may enable more meaningful decision-making prior and would help address pain points in problem statement 1. When considering providing additional information, a key aspect is the need for data to be accurate and provided to stakeholders in timeframes that allow for decisions to be made prior to relevant project development timelines/processes.

EDPR also encourages the CAISO to further consider stakeholder proposals that called for simplified data submittal requirements for new clusters to enable provision of feasibility information to developers prior to continuing the process and to evaluate whether any avaialble advance technologies can be incorporated to expedite facilitation of the interconnection process.

A2) Scoring Criteria to Assess Viability

Generally, EDPR supports the concept of prioritizing projects that are aligned with the locations, quantities, and technologies identified through the resource and transmission planning processes. However, the CAISO should not limit projects arbitrarily to a certain MW limit and should instead focus on ensuring that the readiest projects are to enter the interconnection queue. EDPR encourages the CAISO to continue exploring concepts related to scoring criteria to assess viability of projects with the goal that any project that meets a certain level of viability should be able to submit an interconnection request.

Utilizing commonly accepted metrics that indicate the relative readiness of a project can be beneficial for identifying projects that have smoother paths to commercial operation. Common metrics like increased site control requirements demonstrate tangible project development activities that occur prior to submitting an interconnection request. Similarly, increased financial commitments earlier on in the process can help reduce the number of speculative projects. Within a scoring process, these different factors should be weighted so that no one factor is determinative, and projects are evaluated on their respective overall strength.

B) Queue Management

B1) MMA Modifications

EDPR supports concepts for simplifying the Material Modification Assessment (MMA) but does not support concepts that would limit interconnection customers’ ability to modify projects when dictated by the realities of project development. The CAISO should consider a process where these types of changes can be made without requiring an MMA request. For example, if there are common requests where studies have rarely identified any issues, these types of requests may not require a detailed evaluation and may be more effectively handled outside the MMA process. According to the CAISO’s Modification Assessment Cost Reports, the large majority of MMA requests each year are approved and these changes could protect valuable resources that are currently spent processing MMA requests.

B2) One-Time Withdrawal Opportunity

EDPR generally supports the concept for allowing projects that have lingered in the queue an opportunity to withdraw with limited penalties. We hope to see additional details in the straw proposal on whether this opportunity would happen regularly or if other modifications to queue management would be sufficient to advance the goals related to problem statement 2.

B3) Milestone Updates

EDPR supports proposals for the CAISO to require milestone updates for every project past its schedule dates. Setting deadlines for re-assessing and either confirming or updating achievable schedule dates for every project is reasonable and promotes fairness. If CAISO proposes to assess penalties and potentially terminate executed interconnection agreement, it should provide adequate notice and an opportunity for interconnection customers to cure a deficiency prior to termination.

B4) Suspension Rights

EDPR supports proposing language to limit suspension rights to more specific circumstances or for more limited durations rather than removing them altogether. While we appreciate the problem caused by projects parked in the queue for long periods, there are legitimate reasons for a project to be suspended and that option should still be available with reasonable limits.

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

A) Interconnection Intake

A1) Study Projects Requested by LSEs and Other Offtakers

EDPR is concerned about the idea of load serving entities (LSEs) and other offtakers having the ability to submit lists of projects for higher priority study in the interconnection process. This concept is problematic because LSEs and offtakers won’t know the true economics of each project that has not completed interconnection studies. Efforts to obtain enough data and technical resources to accurately evaluate which projects are most viable would consume valuable time and resources without a guarantee that it would ensure project viability. A poorly designed process utilizing offtaker desires may advantage large LSEs over smaller developers who may not have the resources to replicate power studies and determine the best project. It also introduces potential for LSEs that are also developers to “game the system” and select their own projects for study/approval.

A2) Use of Commercial Traction as a Scoring Criteria

EDPR is concerned about the proposed usage of commercial traction to determine project viability prior to entering the interconnection queue. At this stage of project development, it is too early to understand full costs and therefore negotiate meaningful commercial agreements. Utilizing this type of construct could also be disruptive to competitive procurement processes because it would unnecessarily accelerate commercial negotiations before relevant project facts are known and reduce the accuracy of the underlying assumptions of those agreements.

A3) Use of Auctions to Allocate Queue Capacity

EDPR is concerned about concepts where only projects that are successful in an auction process are studied. Facilitating the design of such an auction structure would require the hiring of experts and would likely merit much more detailed stakeholder discussions on the proposed structure. Even if stakeholders came to agreement on the structure, those additional costs would likely reflect differences in the cost of capital or financial structure of project developers, rather than project viability, because auctions simply raise costs to ration entry into the interconnection process. If the subsequent process after the auction remains highly uncertain with respect to timelines and costs, then it is unlikely that this concept will increase completion rates significantly. Since higher costs will increase risk and reduce margins for developers, it is important that any additional costs paid by interconnection customers to enter the queue reflect significant additional value that makes their request more likely to result in commercial operations, beyond simply the right to be studied first.

A4) Limiting Projects Studied to Certain MW Amounts

EDPR does not agree with limiting MW amounts within transmission zones to the amount of available capacity. We appreciate that limiting the number of projects submitted would make Phase I study results more valuable as predictors of actual costs and timelines, and reduce time demands on CAISO and Participating Transmission Owner (PTO) engineering teams. However, EDPR believes that studying a greater amount is important to preserve greater competition following phase II and to limit significant risk of underdevelopment if the local jurisdictional authorities limit resource development, or the projects selected fail to all reach their commercial operating Date (COD). Of interconnection requests from 2000-2017 in CAISO only 13% have reached COD[1] and while we hope this initiative can improve that statistic, limiting projects so excessively at this point in the development process could potentially create a situation where development is delayed and subsequently California is unable to meet its climate goals.

B) Queue Management

B1) Factors Outside of Interconnection Customers Control

Any requirements placed on generators to remain in the queue should not punish them for delays in constructing upgrades that have seen on the part of the PTOs. Many stakeholders in their comments and presentations noted the disconnect between retention requirements and upgrade timelines. For example, projects receiving Transmission Plan Deliverabiltiy awards next cycle will not get Full Capacity Deliverability Status (FCDS) until upgrades are completed in 2030 or 2032. CAISO should consider how to manage these conflicting timelines and ensure that viable projects are not punished and or excluded by things outside of their control.

[1] Queued Up: Characteristics of Power Plants Seeking Transmission Interconnection as of the End of 2022, Lawrence Berkley National Laboratory, April 2023. https://emp.lbl.gov/sites/default/files/queued_up_2022_04-06-2023.pdf

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

EDPR is disappointed that CAISO has decided that a subscriber network upgrade concept is not within the scope of the IPE process. As reflected in the survey results, TPD allocation is the most important consideration for interconnection customers when assessing viability of a project prior to submitting an interconnection request. Network upgrade costs are also often the largest source of uncertainty for project viability when entering into the queue and limiting the scope fails to recognize the current regime where the GIDAP process studies and allocates necessary upgrade costs for interconnection.

EDPR also encourages the CAISO to consider ways to provide a more meaningful pathway for option B projects that are not selected in the option A process to ensure open access to the grid. Some ideas from the stakeholder proposals that the CAISO should consider further when developing the straw proposal include:

• Whether Option B project sponsors should have the opportunity to reverse their sponsorship decision should costs escalate or if costs be capped in some reasonable way.
• Whether Option B transmission project sponsors should receive compensation for benefits provided to the system.
• Whether estimated Congestion Revenue Rights (CRR) revenues can be provided before Option A/B elections, so developers have some idea of potential off-setting revenues from that source before having to make their elections.
• Whether changes to CRRs are required to make them more financially appealing for interconnection customers to utilize this pathway. 
• Whether projects funding upgrades should be automatically entitled to FCDS without going through the TPD Allocation process.

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

1) Interconnection request intake

Geothermal Rising is concerned that a key cause of the unmanageable size of the latest CAISO queues is speculative information-gathering by developers.  Providing transparent and reliable data on the geographical extent of interconnection capacity early in the study process would be incredibly valuable in mitigating speculative requests and improving the alignment with viable development opportunities and grid capacity. Combining advance information availability with more rigorous requirements to enter the queue should help limit the interconnection queue to projects most likely to come to fruition.  The CAISO’s ongoing planning coordination with the CPUC and CEC including coordination of integrated resource planning to further major policy goals, provides a promising platform to enhance information availability.  An initial assessment of potential interconnection applications using generic information as proposed by the PG&E, SCE and SDG&E, incorporated into a process like the four-phase interconnection proposed by SDG&E would be a good start.  Geothermal Rising supports Middle River Power’s proposal to roll-out an interconnection capacity interface like MISO’s POI Analysis Tool—which is also well-aligned with the requirements in FERC Order 2023.

With more information available up-front to potential developers, CAISO could also implement a point system and a minimum score requirement to be accepted into the primary interconnection queue.  An approach like that presented by AES and other parties would be a good start.  For applications that do not score sufficient points to qualify for the queue, Geothermal Rising supports an alternative process, possibly built on the existing Option B, that offers the ability to prove the point system wrong.  It could resemble the Subscriber PTO approach and require self-financing with a potential refund only if the project proves successful. 

On a related topic, during the August 1^st workshop CAISO asked stakeholders to provide feedback on the upfront timeframe resources should be allowed to secure future transmission capacity.  Geothermal Rising would like to highlight that both geothermal and offshore wind projects require significant timeframes for early project development and execution. The interconnection process should allow these projects to secure interconnection capacity during early project development (5+ years before COD) so that transmission risk can be co-managed with exploration, permitting, and financing risk.  The amount of time projects are allowed to stay in the queue should also reflect the requirements of geothermal and offshore wind development.

Geothermal Rising also appreciates proposals to streamline the interconnection study process without sacrificing the integrity of the study results.  Utility proposals to reduce the required data in the interconnection request, use standard models, and employ cloud resources are all sensible and will maximize the organizational capability of the limited technical staff.

2) Queue management

For queue management, Geothermal Rising supports a two-tiered approach.  First, increase study deposit requirements to further discourage speculative applications.  Second, offer a one-time penalty-free refund of deposits paid, net of incurred costs, for legacy projects to exit the queue.

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

1) Interconnection request intake

Geothermal Rising is concerned with proposals that narrowly focus on commercial readiness without also incorporating considerations for strategic resources with longer project development cycles.  Solar and storage resources can be contracted, procure equipment, and finish design and permitting with much less upfront investment and risk than geothermal and offshore wind projects. The resource diversity and strategic value of these resources must be an important factor in determining their prioritization for interconnection so that they can navigate early project risks without layering on interconnection uncertainty—which could prevent these much-needed resources from being built.

For similar reasons, Geothermal Rising is also concerned with proposals that rely primarily on an auction mechanism such as the proposal from Shell and Savion.  It will be difficult for long-lead projects to compete with solar and storage resources in an auction process due to the additional project development and execution risk.

2) Queue management

Any proposed limitations of time in queue must also account for the increased development time for long lead time resources and provide for demonstration of progress toward completion rather than a fixed time limit.

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

1) Interconnection request intake

As discussed above, Geothermal Rising supports the framework of a scoring process to prioritize projects in the interconnection process such as AES’s proposal—but with a significant weighting for projects that contribute to resource diversity or reflect long-term strategic value for LSEs.  This same prioritization should be extended to the CAISO’s deliverability allocation process so that the projects successfully navigating the queue are well aligned with the projects that are granted deliverability. 

Additionally, identifying additional changes that could support identifying additional interim deliverability would be beneficial, considering the long lead times for many transmission upgrade projects.

2) Queue management

No comment at this time.

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

1. Interconnection request intake

Golden State Clean Energy (“GSCE”) supports proposals involving readiness criteria that will gate and rank projects applying for interconnection. Certain readiness criteria should be a requirement to enter the queue, and GSCE supports an additional layer of readiness assessment that awards points to prioritize queue access based on progress made toward meaningful commercial viability metrics.

Permitting progress is a key element CAISO should consider in scoring project viability for access to the queue. The permitting process represents a major step towards construction readiness because it can take substantial time and resources to complete, but it is necessary for all projects to be constructed. The recent stakeholder survey in this initiative shows that stakeholders broadly recognize the value of permitting as a viability metric, even prior to submittal of an interconnection request.[1]  CAISO should take a similar approach to the permitting point system used in the deliverability allocation process where points are increasingly awarded to projects that are further along in the permitting process.

2. Queue management

GSCE agrees that energy-only projects have limited commercial viability and supports further exploring proposals that involve withdrawing certain energy-only projects from the queue. Given that only one energy-only project has achieved commercial operation as a stand-alone project in the past eight years,[2] it is concerning how many energy-only projects are in the queue.

Further, it is highly concerning that the CPUC resource portfolios contain such a significant quantity of energy-only resources for study in the transmission planning process given the data CAISO provided on the lack of commercial viability for energy-only projects. CAISO should make clear to the CPUC that energy-only projects are not commercially viable and thus should not be included in the resource portfolios (or at least in very limited quantities). Planning for energy-only resources that are unlikely to materialize risks distorting the resource portfolio results, which can lead CAISO to under-plan the transmission system for deliverable capacity.

[1] CAISO 2023 IPE track 2 presentation, at 11-13, August 1, 2023, available at: http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-Track-2-Aug12023.pdf.

[2] CAISO 2023 IPE track 2 presentation, at 24, August 1, 2023.

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

1. Interconnection request intake

GSCE is most concerned about proposals to cap the amount of capacity or number of interconnection requests (“IR”) that can enter the queue in any given window, year-to-year approval of new transmission that can impact what is deemed to be an available transmission zone for interconnection in the following IR window, and the lack of a viable option to pursue interconnection for projects that do not precisely fit within an available transmission zone or that exceed the cap set for that IR window.

The CAISO discussion paper presents an alternative process to interconnect resources that are not selected for study through the scoring process. CAISO proposes that these interconnection requests proceed as Option B projects (as defined in the current GIDAP tariff). A viable Option B that all can pursue could be a solution to the concerns we identified above. GSCE supports further exploration of Option B as an alternative route for projects to seek interconnection as well as an alternative business model for projects to pursue that may be interested in funding ADNUs. Option B exploration should consider aspects of Vistra’s subscription proposal to make Option B more viable. To better inform the discussion going forward and better understand the current lack of interest in Option B, GSCE requests CAISO further explain Option B, its benefits, and the issues that have prevented projects from reaching commercial operation through Option B.

To the extent Option B is proposed to be the means for a project to seek interconnection when it does not meet the new criteria for entering the queue in a given window, CAISO’s first principle would only be met if Option B is a viable option.[1]

In addition, there are other elements that are important to the cap on IRs. Ensuring the cap is not overly aggressive is important to enable sufficient competition and to ensure there are sufficient viable resources to meet California’s GHG and reliability goals. To accomplish these goals, it is likely that CAISO needs to accept for study an amount of capacity that is closer to three times the planned capacity. In addition, to the extent the CAISO imposes an IR capacity cap, it should be based on nameplate capacity and not deliverability because the current IRP portfolios contain a significant amount of energy-only solar that does not reflect commercial interest. Both elements can help CAISO satisfy the third and fifth principles.[2]

2. Queue management

No comment.

[1] CAISO 2023 IPE track 2 presentation, at 9, July 11, 2023, available at: http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-2023-Track%202-Working-Group-Jul112023.pdf (“Prioritize interconnection in zones where transmission capacity exists or new transmission has been approved, while providing opportunities to identify and provide alternative points of interconnection or upgrades.”).

[2] CAISO 2023 IPE track 2 presentation, at 9, July 11, 2023 (CAISO describes the third principle as the following: “Align interconnection and transmission plan deliverability processes with resource procurement functions.”  CAISO describes the fifth principle as the following: Enhance the interconnection process’s ability to support the procurement necessary to meet California Public Utilities Commission (CPUC) resource portfolios and California Energy Commission (CEC) SB 100 portfolios, and portfolios established by non-CPUC jurisdictional LRAs.”).

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

No comment.

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

(1) For interconnection request intake:

• Use of generic studies and automated Phase 1 study process. GridStor agrees with proposals from SCE, PG&E, SDG&E that Phase 1 studies should use generic project models and with NextEra that Phase 1 studies should be automated and standardized as much as possible. Doing so will speed up the initial study process without sacrificing the important project-specific details needed in interconnection studies, such are provided in Phase 2 studies. Speeding up Phase 1 is particularly important if Phase 1 results provide a reasonably reliable estimate of costs and timelines to allow developers to decide whether to continue investing in a project or withdraw from the queue.
   
• Use criteria scoring to prioritize projects for study. GridStor agrees with the ISO and numerous stakeholders that a method of criteria scoring to rank projects (either for interconnection study and/or TPD allocation) will allow a merit-based rationing of resources for interconnection study and completion. Since many of the ISO’s criteria scoring proposals aim to realize a “first-ready first-served” approach to interconnection, and the ISO should seek to align the TPD allocation matrix with a criteria scoring approach if chosen.
   
  • Use criteria that prioritize provision of local RA and use of previously disturbed land. GridStor supports New Leaf Energy’s proposal to give priority scores to resources that are sited in LCAs, where local resources are needed now or will be needed in the future to avoid local resource adequacy deficiencies. Locating resources in densely developed load pockets will provide valuable reliability for the CAISO system, particularly as a means to manage around transmission constraints. Development in dense load pockets is also more challenging than sites far from population centers. To avoid systematically biasing development away from dense load pockets, CAISO can account for that value with a specific scoring criterion. GridStor adds that priority scores should be awarded to projects that utilize previously disturbed land, which will reduce environmental impacts associated with resource development to meet California state goals.
     
  • Make site control a scoring criterion. GridStor supports the ISO’s and AES’ proposal to make site exclusivity or control a scoring criterion—and specifically instead of requiring site exclusivity demonstration at the time of an interconnection request. Site exclusivity as a gating mechanism at the time of interconnection request will limit the development of resources like battery storage that provide resource adequacy in dense load pockets in California, where land costs are very high and lease options are limited in duration to 1 or 2 years. Assigning a scoring criterion to site control or exclusivity will still enable this to remain an important consideration without hindering the ability of California to meet local resource adequacy and storage resource deployment goals. Additionally, requiring site exclusivity after Phase 1 results is more likely to align with development timelines, particularly if those results provide meaningful information about project costs and timelines, In light of FERC Order 2023, GridStor supports CAISO using a criteria scoring approach to manage speculative requests and asks that the ISO seek an independent entity variation to this effect, given its reliability needs and California state energy policy goals.
     
• Provide greater upfront information to inform interconnection requests. GridStor agrees with numerous proposals from stakeholders aimed at providing more information prior to or at the beginning of queue entry. We agree with SDG&E and PG&E proposals to include information about expected timelines for network upgrades at the project scoping stage.

(2) For queue management:

• Fix the misalignment of TPD allocation and demonstration of contracting. GridStor agrees with proposals from Clearway and LSA to relax escalating TPD retention requirements that require evidence of shortlisting or PPA execution. Additionally, GridStor supports REV Renewables’ proposal that shortlisting/PPA execution only be demonstrated within a certain number of years before the PTO estimates completion of the longest lead network upgrade and/or interconnection facility, with the addendum that significant changes to completion timelines announced by the PTO should exempt the interconnection customer from needing
   
• Enhance the option to self-build upgrades. GridStor supports proposals by Vistra and REV Renewables to increase workability for interconnection customers to self-fund network upgrades by prioritizing such projects for TPD allocation, such as by including a commitment to self-build upgrades in the TPD allocation matrix. Additionally, the ISO should expand the option available to interconnection customers to self-build network upgrades & interconnection facilities, such as allowing the interconnection customer to do so when PTO completion schedules or costs increase above a certain threshold. This could be an option based on the same triggers for penalty-free withdrawal, which are discussed later in our comments.

• Require reporting of summary statistics/trends regarding interconnection process timelines. The ISO and PTOs will better be able to manage processes if those processes are measured. GridStor supports Gridwell’s proposal that the ISO report periodically on statistics and trends associated with interconnection processes, similar to SPP’s Quarterly Project Tracking Report. Specifically, we propose that this report: timelines for each study phase, estimated upgrade completion timelines, actual upgrade completion timelines, the frequency & magnitude of changes to each of those timelines, and the category of reason for such changes to those timelines (e.g., supply chain, re-prioritization, etc). Making this information publicly available will provide greater visibility to the ISO and other stakeholders on PTO activities and create greater accountability for PTOs to meet their commitments. TPP planning inputs provided by CPUC in this initiative indicate California must interconnect 70 GW of cumulative new resources over the next decade, and PTOs need to be on faster and more predictable timelines if CAISO will successfully meet those goals.
   
• Reduce risks to developers from lengthening timelines as the interconnection process proceeds. In addition to Gridstor, multiple stakeholders such as EDF, REV, Vistra, and others voiced support for greater PTO accountability for interconnection completions. As the ISO principles state, all parties share increased responsibilities to improve the interconnection process.

As developers are expected to meet additional requirements for interconnection request and entry, including more upfront costs for deposits/penalties, commercial readiness demonstrations, and even potentially auctions, it is both fair and appropriate that developers not be allocated additional risk due to PTO performance, in the form of either substantially increased carrying costs and/or customer contracting risk. Given the significant ISO effort to focus interconnection requests in areas with expected interconnection capacity and to reduce the number of studied projects while increasing viability, the ISO and interconnection customers should expect that PTOs be capable of providing predictable and reasonable timelines for completing network upgrades.

To accomplish this, the ISO should reallocate risk of lengthening timelines away from interconnection customers as the interconnection process proceeds. Doing so will enable project financing and other activities needed to make earlier demonstrations of commercial readiness for all companies, not just those with the largest balance sheets:

• Allow low/no-penalty withdrawal for a project if after Phase 1, a PTO specifies a network upgrade & interconnection facility completion timeline longer than 3 years. While some projects will expect longer network upgrade timelines due to size/location, many other projects are premised on a feasible site within a more bounded timeframe—particularly if they expect to contribute to meeting LSE procurement needs. Projects should be able to withdraw early in the process without penalty if the initial PTO estimate for network upgrade timelines is excessive. Alternatively or in addition, increasing options for interconnection customers to self-build upgrades and interconnection facilities, such as by automatically triggering the right of interconnection customers to do so, can also help address these timelines.
   
• Allow low/no-penalty withdrawal if a PTO changes the network upgrade & interconnection facility completion timeline estimates by more than 1 year (or 25%, in the instance of projects with timelines of 4+ years) between Phase 1 and Phase 2 results or between Phase 2 restudies. Since an interconnection customer would have based its decision to proceed to Phase 2 based on information derived in Phase 1 and is subject to greater penalties when it advances to Phase 2, it is critical that developers be afforded the flexibility to avoid carrying significantly more risk that they do not control.  This parallels the QC14 Supercluster Interconnection Procedures published in June 2014, which made interconnection customers eligible full refunds if their Phase 2 interconnection study extends the longest-duration reliability network upgrade by one year or more. This proposal also parallels directives in Order 2023, wherein increases in network upgrade costs between study phases trigger an option for penalty-free withdrawal.
   
• Allow low/no-penalty withdrawal if a PTO changes the network upgrade & interconnection facility completion timeline by more than 2 years overall after an interconnection agreement is executed. Given that interconnection customers will order equipment and undertake other costly measures after signing an interconnection agreement, it is critical that PTO schedule changes not shift cost and risk to the interconnection customer. Creating accountability for significant or repeated PTO schedule changes is also necessary in combination with the preceding measures to avoid creating an incentive to announce timelines changes only after interconnection agreements are executed. It is possible that there may need to be an exception for compelling circumstances provided by the PTO, with such exceptions approved by the ISO. Given the cost and challenge for an interconnection customer associated with getting to this point in the process, a “circuit breaker”  approach is warranted to match the high risk.
  
  Low/no-penalty withdrawal in this case means remitting all financial securities, auction proceeds, and unused study funds if pre-GIA. If post-GIA, this would include all unused network upgrade funds plus a 50% share of funds expended to date for network upgrades, splitting the responsibility with the PTO. We suggest cost sharing should be be reasonable, as significant delays to network upgrade timelines may also indicate that significant work by PTO has yet to been expended.

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

(1) For interconnection request intake:

• Do not prioritize PPAs before deliverability is assessed and awarded. The ISO has proposed to use the existence of customer contracts to rank project priorities for interconnection study and/or for awarding TPD allocations. We agree with Vistra and other stakeholders in cautioning against this approach. Doing so is out of step with the reality of development and the timeline needed to determine deliverability for projects that seek to provide resource adequacy to customers via contract. Particularly for TPD allocation, this can create a situation in which LSEs—some of whom are transmission owners—choose which interconnection customers will be awarded deliverability on their transmission systems, which FERC may deem contrary to open access transmission.
   
  • Provide scoring weight for all customer contracts, not just those with LSEs. Given that non-LSE brokers may also wish to sign contracts for energy or resource adequacy from interconnection customers, if the ISO does provide priority to projects demonstrating customer agreements, it should prioritize such agreements with non-LSE brokers as well as LSEs. Additionally, to ensure fair dealing, the ISO should not prioritize projects where the contracting party is an affiliate of the interconnection customer.

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

(1) For interconnection request intake:

• Higher deposits plus scoring criteria should replace gating mechanisms like site control.  GridStor believes that NextEra’s proposal for higher entry fees and deposits, if complemented with scoring criteria or auctions, should be sufficient for deterring highly speculative projects in CAISO. Requiring site control or other significant early demonstrations of viability as a gating mechanism for entry will be duplicative of higher fees, deposits, and other measures, which accomplish the same end. As discussed earlier in our comments, CAISO should seek to keep development pathways in dense load pockets more available to ensure California can meet reliability needs and state policy goals.
   
• Developer concentration limits are needed. As the ISO considers various means to limit the number of interconnection requests that are studied or approved for further progress, market competition requires safeguards against over-concentration of interconnection queue positions into one or a few companies’ possession. The ISO should consider a reasonable limit for the number and/or MW of interconnection requests system wide, as well as potentially specific to each POI, that a single company including affiliates may possess. MISO has proposed in its current interconnection reform process to include a similar limitation on queue capacity any one entity can hold.

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

Qcells appreciates the time and effort the CAISO has put forth in hearing and incorporating stakeholder concerns, as well as providing a robust initial proposal for reform. Qcells has also appreciated the opportunity to attend multiple in-person sessions, which were very well-organized, well-provisioned, and well-run overall – so thank you for organizing!

Qcells has reviewed the CAISOs initial proposal, alternate proposals, survey results, and CAISOs more detailed outline presented at the last stakeholder session – our comments reflect our stances/opinions with that information under consideration.

Regarding scoring criteria – Qcells supports the CAISO developing a robust scoring criterion for advancement into the study phases. Proposals from organizations such as AES, and New Leaf Energy provide interesting frameworks to consider. Although, we would like to see more benefits, from a scoring standpoint, for features such as domestic content and higher DFAX for network upgrade cut off. All that said, QCells supports further discussion and buildout.

Qcells reviewed proposals regarding employing AI into the LGIP to expedite tasks associated with the review process. Qcells supports a deeper dive into this concept, as efficiencies are being discovered (as research indicates) across a broad range of industries. Qcells is interested in seeing what improvements to study timelines can be made by employing AI. Qcells suggests a separate working group to discuss this issue more broadly.

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

Qcells has no comment at this time.

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

The division, in terms of presentation, between alternate proposals and CAISO’s discussion paper felt like it hurt the overall process. Initial expectation of early breakouts into working groups to discuss CAISO’s framework never (or hasn’t) materialized. As it stands, there’s a multitude of topics to discuss and not knowing the significance of each, from CAISO’s perspective, makes commenting a bit difficult. In the future, it would be nice to see a more integrated discussion process – where the CAISO and stakeholders present proposals in an integrated fashion and solutions, or at least initial proposals, are made with consensus.

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

Interconnection Request (IR) Intake

Intersect Power (IP) believes the goal of IR intake reform should be to return the study process to a regular, predictable cluster-study window, as exemplified by pre-QC14 cycles by focusing resources on the matriculation of the most advanced projects. Additionally, IP sees value in maintaining the ability for generation diversity enabled by developers that would be lost if the CAISO was overly restrictive to studying only CPUC-derived portfolios. It’s critical that a competitive generation development landscape be maintained after reforms are implemented.

Viability Scoring Criteria

IP supports an IR intake framework that includes entry fees, including higher than currently stipulated under the CAISO Tariff, and viability scoring criteria. IP does not support the idea of limiting the location of projects to defined electrical areas. Rather the IR intake process should rely upon the viability scoring criteria framework to determine eligibility, which could include locational attributes, to identify and study the most advanced projects. Potential scoring criteria include:

• Site Exclusivity or other form of land commitment
• Permitting advancement (similar to TPD affidavit scoring)
• Capacity additions for new projects utilizing existing gen-ties, substations positions, or stand-alone Network Upgrades
• Project size (larger projects can absorb fixed costs more efficiently than smaller projects and having fewer projects to study would be beneficial)
• Project voltage (benefits for bulk energy movement throughout CAISO system when delivered to higher voltage)
• Locational attributes

Simplified IR Requirements

IP supports the PG&E and SDG&E proposals for simplified IR packages, with additional details provided later for Phase II.  IP also supports the SCE proposal to use standard models for each technology, instead of detailed project-specific modeling, which would be deferred to much later in the process.  These proposals would delay considerable validation and verification processes until after the point where many projects typically drop out, reducing the burden of the study process overall.

Queue Management

Longer-Term Interim Deliverability Information / Certainty

The CAISO raised the idea in the Deliverability Assessment Methodology initiative that it could provide earlier indications about the availability of Interim Deliverability beyond the year before each RA Compliance Year. This idea, along with an ability to have Interim Deliverability certainty beyond a single year, are crucial to keep project CODs on track and avoid postponement to match the increasingly long DNU in-service timeframes.

MMA Request Streamlining

As explained below, IP strongly opposes limitations on the number or timing of MMA requests. The CAISO said at the Working Group 5 meeting that it would be unable to expand the list of modifications that could be granted without MMA requests, thus streamlining the MMA process should then be a very high priority. 

The CAISO has taken steps in this direction, such as the new on-line validation tool, and these steps should help the process.  The CAISO should consider other steps, both in its internal processing and interaction with developers, to streamline this process.  For example, stakeholders have suggested streamlining the validation process by:

• Allowing a simple developer confirmation that earlier modeling data are still current, rather than re-submittal and re-validation of such data;
• Including a validation phone call of engineers as part of the standard MMA process, for projects that do not pass validation upon the first review; and
• Implementing a consistent best-efforts time limit for CAISO/PTO validation review of MMA submittals and data re-submittals, e.g., 10 Business Days (similar to New Resource Implementation Process submittal turn-arounds).

Longer-Term Limited Operation Study (LOS)

The Discussion Paper proposed allowing LOS requests as early as 9 months before the In-Service Date, up from 5 months today.  The CAISO said at the WG5 meeting that it has discussed internally extending the LOS timeline beyond 9 months, but technical personnel are not confident that they can provide accurate information any more in advance. 

IP appreciates the timeline extension to 9 months.  However, because of the extremely high benefit from such earlier information, IP recommends continued consideration of ways to offer a longer timeline of at least 2 years.

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

Interconnection Request (IR) Intake

As described in IP’s previous comments to the 2023 IPE Discussion Paper, IP is concerned with overreliance on the CPUC portfolios, which are constructed using a variety of planning-level assumptions that carry a wide-range of uncertainty and accuracy, to constrain where developers can pursue projects. It is critical to maintain a robust, diverse, market-driven approach to generation development to ensure that realized portfolios (as opposed to planned portfolios) are the most cost-effective outcome for rate payers. The CAISO’s Transmission Planning Process (TPP), which relies upon the CPUC’s recommended portfolios, already analyzes impacts to the grid for the described portfolio and provides market signals, in the form of transmission upgrades, to generator developers for where resources are preferred based on techno-economic modeling outcomes. The CPUC’s current Busbar Mapping process utilizes commercial interest (i.e., the active CAISO interconnection queue) as one of its factors influencing portfolio creation, serving as a valuable feedback loop between planning institutions and market participants. Implementation of strict locational restrictions for generation IRs eliminates that valuable feedback loop and creates a self-fulfilling portfolio outcome entirely driven by the CPUC, lacking any real competitive pressure to challenge planning-level assumptions and their resulting outcome.

Queue Management

MMA Timing and Request Limits

IP strongly opposes arbitrary limitations on the timing and number of MMA requests that can be submitted for a project.  As development timelines increase, the flexibility to modify projects over time becomes more critical to maintaining project progress and viability.  Technological advancements, permitting requirements, commercial off-take arrangements, and construction contracting and equipment deliveries all require adjustments over time. 

Delays in the ability to submit and receive approval for necessary changes to otherwise viable projects will simply cause project delays, e.g., delays in equipment procurement or construction delays where configuration changes are needed.  If the number of MMA requests per project is limited, then projects may not be able to proceed at all (e.g., if needed equipment becomes unavailable), leading to complete project loss, or may have to proceed with less-efficient equipment or configurations if changes cannot be made.

It is natural that the number of MMA requests would increase as the number of projects in the queue grows and development timelines lengthen (i.e., more active projects in the queue, and for longer periods), and that this could place burdens on CAISO and PTO resources.  However, the response to that increased workload should be a combination of streamlining the MMA process and adding CAISO and PTO resources (which are paid for by developers), and not impairing the progress and viability of the projects the process is supposed to serve.

TPD Transfer Limitations

Under the CAISO WG5 meeting proposals: (1) Projects transferring TPD must be withdrawn from the queue upon approval of the transfer request; and (2) no transfer requests allowed once a project starts construction (none has ever been requested). IP opposes both of these proposals as arbitrary and unnecessary. 

First, the inter-project TPD allocation process is still very new.  The CAISO said at the WG5 meeting that it had approved CAISO has approved seven inter-project TPD transfers, but no other information was available about the subsequent status of the projects involved and no specific concerns about those transfers was identified.  It is far too early to determine the effectiveness of this tool, and the number of transfers hardly seems to be overwhelming the system, especially since the “analysis” required is mainly verification of the transfer amounts and math that can be done with a calculator.

Second, as noted at the WG5 meeting, TPD transfers between several projects owned by a developer can help configure the projects to better meet off-taker contracting needs, which improves the viability of the projects involved.

Third, projects transferring TPD to other projects would, to that extent, be converted to Energy Only.  There is no reason to force them to withdraw from the queue if they continue to progress and meet viability requirements for other Energy Only projects, e.g., increased CAISO enforcement of:

• GIA milestone deadlines, which (as noted above) the CAISO is already starting to enforce and proposes in this initiative to increase enforcement; and
• BPM for Generator Management, Section 6.5.2.1 (Time in Queue), where the CAISO decided in the 2021 IPE initiative to increase enforcement of the project viability demonstrations in that provision (applicable to both Energy Only and FCDS/PCDS projects). 

Finally, the CAISO has provided no justification for imposing a prohibition on TPD transfers once a project starts construction.  The CAISO said no projects have even requested such a transfer, so – at a minimum – a prohibition is unnecessary and highly premature. 

In fact, there is no reason to prohibit TPD transfers even for projects that have already reached COD, if a project does not need its TPD and another project at the same substation can use it.  The CAISO already allows this in the repowering process, and there is no apparent reason for restricting other similar transfers.

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

Queue Management

The CAISO said at the Working Group 5 meeting that it would only consider the one-time withdrawal concept with PTO protections, e.g., more costs could be fall to later clusters based on separate study. The CAISO’s assumption was that a separate study would be performed to determine these impacts, and it said that it was “lacking resources” to perform such a study. This proposal, among other things, ignored:

• The resulting cost reductions to ratepayers, i.e., the benefits of the project withdrawals.  By focusing only on the “costs” to PTOs, and the upgrades assigned to the withdrawing projects, it completely disregards: (1) the fact that some of those upgrades will no longer be needed; but, more importantly (2) the rationale for the proposal – to allow removal of unneeded upgrades currently assigned to later-queued projects.  Overall, if the later-queued projects must fund those unneeded upgrades, they will receive refunds, and thus ratepayers will ultimately fund them.
• SDG&E’s point at the WG5 meeting that PTO funding requirements in GIDAP Section 14.2.2 would only apply where withdrawing projects have executed GIAs – otherwise, the cost of their assigned upgrades could be assigned to later-queued projects.  SDG&E noted that 80% of old projects in the queue have GIAs, but the other 20% are probably more likely to drop out, and their upgrade costs would not be borne by the PTOs.

Finally, the CAISO need not perform a separate study to implement this idea – instead, it could simply use the Reassessment process, which is already designed to account for the impacts of project withdrawals. 

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

LSA supports the concepts and proposals described below, i.e.:

For Interconnection Request (IR) intake:

• Regular Interconnection Request (IR) application windows
• Locational data availability
• Intake framework overall
• Supplementation of the screened/scored project list
• Simplified IR requirements suggested by PTOs

For Queue Management:

• Option B reform
• Use of proxy or standard interconnection costs by area, with related cost caps
• Single-phase study process
• Longer-term Interim Deliverability information
• MMA request streamlining
• Longer-term Limited Operation Study (LOS)
• Group B & D TPD retention conditions

IR INTAKE

Regular IR application windows

LSA strongly believes that the uncertainties created by the extended Cluster 14 (C14) “supercluster” schedule, and the known-in-advance uncertainties about the availability and timing of post-C15 cluster windows, were largely responsible for the huge number and (especially) capacity submitted into the C15 window.  The CAISO should take whatever actions needed to return the process to a regular, predictable cluster-study IR application window.

Locational data availability

The CAISO proposed at the Working Group (WG) 5 meeting on August 1^st to provide locational information shown below.

Zonal Information

Transmission constraints within zones (Transmission capability limits)

Allocated TPD within zones

Public queue data & heat map

LSA strongly supports provision of these data, along with: (1) better information about the boundaries of the proposed TPD zones; (2) available TPD for each zone, and smaller areas within zones; and (3) physical interconnection information, e.g., available positions within substations and substation expansion potential. 

AES’ proposal for an “Annual Interconnection Overview Report,” posted at least 6 months before IRs are due, would be one way to provide regular, consolidated information in a usable format.

Intake framework overall

LSA does not object to an intake framework that includes entry fees and screening/scoring criteria.

Two kinds of screening/scoring criteria were discussed during the workshop process:  Project location and project attributes (e.g., viability).  LSA supports a points-based system that allows for balance between these criteria types, e.g., projects in less-preferred location could still be accepted for study if they score higher for project viability or other attributes, instead of being rejected outright.  LSA’s comments below also address other screening/scoring issues.

Location:  In applying any locational criteria, the CAISO should look beyond capacity available from existing or currently approved transmission upgrades to also consider areas where future development is indicated in its 20-year transmission outlook – in other words, where upgrades are likely to be approved in the future – especially given the increasingly long lead times for PTO upgrades like circuit-breaker overload mitigation.

Project readiness:  Site Exclusivity or other form of land commitment is key to limiting Interconnection Request (IRs) to reasonable numbers and MW size, since there is only so much available land in a given area.  Site-specific work such as wind/solar resource assessments, site surveys, permitting activity, and right-of-way commitments can also be included. 

Other project attributes:  Additional viability points or other points should be given for:

• Capacity additions or new projects using existing gen-tie lines or substation positions (no/few new Interconnection Facilities needed)

• IRs submitted for limited purposes (e.g., where required, for repowering, or behind-the-interconnection capacity additions) that do not require additional deliverability or POI capacity

• Unique or needed operational capabilities, e.g., resource diversity or location-specific limitations

• Social benefits, e.g., related to low-income/disadvantaged areas or other positive externalities

• Other benefits to the system or state policy requirements or needs.

Supplementation of the screened/scored project list

Any scoring or other screening process cannot capture all aspects of project readiness or value.  Regardless of the criteria used to screen or score IRs, the CAISO IR intake reform should include an “appeals” type option.    This appeals or (other equivalent) process would give developers a chance to demonstrate (through third party consultant studies or other means) that projects scoring lower or otherwise excluded in the earlier process offer benefits not captured under the screening/scoring framework and, therefore, should be accepted for study.

Simplified IR requirements suggested by PTOs

LSA supports the PG&E and SDG&E proposals for simplified IR packages, with additional details provided later for Phase II.  LSA also supports the SCE proposal to use standard models for each technology, instead of detailed project-specific modeling, which would be deferred to much later in the process.  These proposals would delay considerable validation and verification processes until after the point where many projects typically drop out, reducing the burden of the process overall.

QUEUE MANAGEMENT

Option B reform

The CAISO proposals in the Discussion Paper and at the WG5 meeting stated that projects not located in areas that currently have available capacity, and/or those that fail to “make the cut” under any scoring system, would be excluded in the initial screening but could perhaps proceed instead using “Option B” or some similar process.

LSA agrees that the concept of limited developer funding of certain ADNUs or other upgrades may have some merit.  However, it is very clear that, absent several key reforms, this so-called “option” is simply not viable – i.e., is not an option at all.  As the CAISO has stated, no upgrades have ever been constructed through an Option B election.

Reforms have been suggested by LSA, in this initiative and before, and by various other stakeholders during the workshops as well.  The CAISO should adopt the reforms listed below, as a start to creating a more-viable Option B.

• Facilitate the Option B communication process.  Developers have no way of knowing which other developers of potential projects in their areas may have indicated a willingness to proceed under Option B.  The CAISO should support voluntary disclosure and notice within cluster groups of developers and projects willing to explore Option B funding.

• Facilitate project financing support. 

• Postings for Option B upgrades should be separate from those for other upgrades, and projects sharing Option B upgrades should receive forfeited security postings for those upgrades if one withdraws from the queue, since they will bear the remaining upgrade costs. 

• Option B transmission project sponsors should receive compensation for benefits to the system, e.g.: (1) ratepayer benefits, as measured using the TEAM methodology; and (2) deliverability benefits to other new generation/storage projects. 

• Estimated CRR revenues should be provided before Option A/B elections, so developers have some idea of potential off-setting revenues from that source before their elections.

• Provide a post-TPD Allocation election option:  Allow projects initially electing Option A that do not receive a TPD Allocation to switch to Option B.

• Provide a reversion option.  Option B project sponsors should have the option to reverse their sponsorship decision should costs escalate (increases in overall project costs and/or their share of costs), i.e., allow reversion to Option A, unless the costs are capped in some reasonable way.

• Clarify the path toward TPD Allocations for Option B projects.  They should either be automatically entitled to FCDS without going through the TPD Allocation process (see, e.g., the earlier Interim West of Devers upgrade) or, at a minimum, be placed in a higher TPD Allocation priority group (“Group A+”).  In other words, they should receive the benefit they are paying for.

Use of proxy or standard interconnection costs by area, with related cost caps

At the WG5 meeting, the CAISO proposed “proxy or standard interconnection costs for each area, maybe cost cap at that level +X%.”  There was broad-based support at the meeting for this concept as a way to provide certainty to both developers and LSEs so projects can proceed more quickly.  LSA agrees with:

• AES’ statements at the workshop that proxy costs and cost caps early in the process, along with some timelines for potential upgrades and project CODs, would facilitate earlier PPAs and move projects forward toward development more quickly.  The CAISO’s concept would be most helpful if schedule/COD estimates could be provided along with the increased cost certainty.

• Peninsula Clean Energy (PCE) support at the workshop for “greater socialization” of interconnection costs, with standard costs at an average level where some might come in higher and some lower, perhaps with some screens to make sure actual costs were not at some unreasonable level.  PCE agreed with AES that, knowing maximum costs in advance, projects could invest more to move their projects through the development process quicker; PCE added that fewer projects would likely drop out later and leave LSEs short.  As PCE said, “ratepayers pay anyway” for transmission, and this would lower risk to individual LSEs.

Single-phase study process 

The CAISO is clearly moving toward limiting project number and capacity to accommodate capacity and workload limits, and presumably to select the most viable projects for study.  The CAISO’s proposal at the Working Group 5 meeting that this could allow the study process to be reduced to a single study, without the need for the first study that serves that purpose today, would be a logical potential additional benefit of this approach.  LSA supports further exploration of this concept.

Longer-term Interim Deliverability information

The CAISO raised the idea in the Deliverability Assessment Methodology initiative that it could provide earlier indications about the availability of Interim Deliverability than the year before each RA Compliance Year.  LSA strongly supports this idea, in both that initiative and this one, because it would help provide contractable assurance of available Interim Deliverability.  This assurance is crucial to keeping project CODs on track and avoiding postponement to match the increasingly long DNU in-service timeframes.

MMA request streamlining

As explained below, LSA strongly opposes limitations on the number or timing of MMA requests.  The CAISO said at the Working Group 5 meeting that it would be unable to expand the list of modifications that could be granted without MMA requests, but streamlining the MMA process should then be a very high priority. 

The CAISO has taken steps in this direction, such as the new on-line validation tool, and these steps should help the process.  The CAISO should consider other steps, both in its internal processing and interaction with developers, to streamline this process.  For example, LSA and other stakeholders suggested streamlining the validation process by:

• Allowing a simple developer confirmation that earlier modeling data are still current, rather than re-submittal and re-validation of such data;

• Including a validation phone call of engineers as part of the standard MMA process, for projects that do not pass validation upon the first review; and

•  Implementing a consistent best-efforts time limit for CAISO/PTO validation review of MMA submittals and data re-submittals, e.g., 10 Business Days (similar to New Resource Implementation Process submittal turn-arounds).

As LSA said in the workshops, the CAISO should also explore AI applications that could streamline and automate at least some of the IR and MMA review process.  (The issue of MMA request streamlining is addressed further under Q2 below.)

Longer-term Limited Operation Study

The Discussion Paper proposed allowing LOS requests as early as 9 months before the In-Service Date, up from 5 months today.  The CAISO said at the WG5 meeting that it has discussed internally extending the LOS timeline beyond 9 months, but technical personnel are not confident that they can provide accurate information any more in advance. 

LSA appreciates the timeline extension to 9 months.  However, because of the extremely high benefit from such earlier information, LSA recommends continued consideration of ways to offer a longer timeline of at least 2 years.

Group B & D TPD retention conditions

As LSA and others said during the workshops, there is a large disconnect between retention requirements & upgrade timelines.  Some projects receiving TPD awards next cycle will not get FCDS until required upgrades are done in 2030 or 2032, and those projects can either:

• Execute PPAs now, for their current nearer-term CODs, and take a large risk that there will be no Interim Deliverability (so RA deficiency penalties would apply) for many years; or

• Delay their CODs to match the upgrade-construction timeline, but then there may be no chance to get the PPAs needed for TPD retention, since there are no LSE procurement directives or authorizations that far into the future.

The CAISO should either:

• Give projects longer-term Interim Deliverability certainty, so projects can execute PPAs to reach their CODs even though the upgrades needed for FCDS/PCDS won’t be done until much later (preferred, because the state needs these projects sooner, not later); or

Delay the required PPA showings until a timeframe where LSE procurement would actually occur.

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

All of the LSA’s comments here address Queue Management issues.

LSA is very disappointed and concerned at the numerous proposals, by the CAISO and others, to limit or remove the flexibility needed by developers to advance their projects in a timely manner and configure them to meet changing market needs, leading to the loss of otherwise viable projects.  LSAs comments below address those counterproductive proposals, i.e.:

• Hard time-in-queue limits

• MMA timing and request limits

• TPD transfer limitations

To the extent that these necessary modifications impose additional burden on the CAISO and PTOs, the response should be to streamline and improve the efficiency of the process, not impair projects needed to meet system and market needs.

Finally, LSA wishes to offer input to CAISO citation in its WG5 presentation of outliers as reasons for imposing restrictions on all projects.  These extreme examples are not typical and thus not helpful to the process.  (The one project with 14 MMAs is clearly more than the typical amount.  The daisy-chain TPD transfer example took place largely before the current inter-project TPD transfer process was even implemented, the “transfer-from” projects did drop from the queue, and the “transfer-to” capacity is proceeding to achieve COD – in other words, the transfer accomplished the purpose for which it was intended.)

Hard time-in-queue limits

LSA strongly supports measures to prevent non-viable projects from “lingering” in the queue.  LSA has supported (and continues to support):

• The Commercial Viability Criteria for TPD retention

• BPM for Generator Management Section 6.5.2.1 criteria for assessing time-in-queue extensions for both FCDS/PCDS and Energy Only projects

• Active and proactive enforcement of GIA milestones.

The CAISO has been stepping up enforcement in these areas, and it appears that these efforts are having impacts in removing non-viable projects from the queue.  LSA also supports addition of reasonable milestones to the standard GIA Appendix B template, such as Notice to Proceed and start of construction.

However, LSA strongly opposes arbitrary time-in-queue limitations for projects that continue to show that they are viable, based on the applicable viability demonstrations.  If these projects meet the viability demonstration requirements but are not viable, then the requirements should be changed; if these projects are viable, then they should not be removed from the queue, especially since such removals would likely come late in the development process, with the resulting project loss adversely impacting both the developer and the project off-takers.

MMA timing and request limits

Likewise, LSA strongly opposes arbitrary limitations on the timing and number of MMA requests that can be submitted for a project.  As development timelines increase, the flexibility to modify projects over time becomes more critical to maintaining project progress and viability.  Technological advancements, permitting requirements, commercial off-take arrangements, and construction contracting and equipment deliveries all require adjustments over time. 

As LSA has stated in workshops, delays in the ability to submit and receive approval for necessary changes to otherwise viable projects will simply cause project delays, e.g., delays in equipment procurement or construction delays where configuration changes are needed.  If the number of MMA requests per project is limited, then projects may not be able to proceed at all (e.g., if needed equipment becomes unavailable), leading to complete project loss, or may have to proceed with less-efficient equipment or configurations if changes cannot be made.

It is natural that the number of MMA requests would increase as the number of projects in the queue grows and development timelines lengthen (i.e., more active projects in the queue, and for longer periods), and LSA understands that this could place burdens on CAISO and PTO resources.  However, the response to that increased workload should be a combination of streamlining the MMA process and adding CAISO and PTO resources (which are paid for by developers), and not impairing the progress and viability of the projects the process is supposed to serve.

TPD transfer limitations

Under the CAISO WG5 meeting proposals: (1) Projects transferring TPD must be withdrawn from the queue upon approval of the transfer request; and (2) no transfer requests allowed once a project starts construction (none has ever been requested).

LSA opposes both of these proposals as arbitrary and unnecessary. 

First, the inter-project TPD allocation process is still very new.  The CAISO said at the WG5 meeting that it had approved CAISO has approved seven inter-project TPD transfers, but no other information was available about the subsequent status of the projects involved and no specific concerns about those transfers was identified.  It is far too early to determine the effectiveness of this tool, and the number of transfers hardly seems to be overwhelming the system, especially since the “analysis” required is mainly verification of the transfer amounts and math that can be done with a calculator.

Second, as noted at the WG5 meeting, TPD transfers between several projects owned by a developer can help configure the projects to better meet off-taker contracting needs, which improves the viability of the projects involved.

Third, projects transferring TPD to other projects would, to that extent, be converted to Energy Only.  There is no reason to force them to withdraw from the queue if they continue to progress and meet viability requirements for other Energy Only projects, e.g., increased CAISO enforcement of:

• GIA milestone deadlines, which (as noted above) the CAISO is already starting to enforce and proposes in this initiative to increase enforcement; and

• BPM for Generator Management, Section 6.5.2.1 (Time in Queue), where the CAISO decided in the 2021 IPE initiative to increase enforcement of the project viability demonstrations in that provision (applicabley to both Energy Only and FCDS/PCDS projects). 

Finally, the CAISO has provided no justification for imposing a prohibition on TPD transfers once a project starts construction.  The CAISO said no projects have even requested such a transfer, so – at a minimum – a prohibition is unnecessary and highly premature. 

In fact, there is no reason to prohibit TPD transfers even for projects that have already reached COD, if a project does not need its TPD and another project at the same substation can use it.  The CAISO already allows this in the repowering process, and there is no apparent reason for restricting other similar transfers.

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

LSA comments here on the “one-time withdrawal opportunity” or “tax holiday” proposal.

The CAISO said at the WG5 meeting that it would only consider this concept with PTO protections, e.g., more costs could be fall to later clusters based on separate study.  These details were proposed:

• ICs submit Withdrawal Notice (projects considered withdrawn upon receipt).

• PTOs won’t inherit cost responsibility due to withdrawals, i.e., the CAISO would waive GIDAP Section 14.2.2.

• All cost responsibility/shifts will fall to any current/later-clustered project(s) sharing that NU and/or a PNU that the withdrawing project was supposed to fund.

• Cost Responsibilities (CCR, MCR, MCE) may increase.

The CAISO’s assumption was that a separate study would be performed to determine these impacts, and it said that it was “lacking resources” to perform such a study.

LSA was surprised by the extremely one-sided and short-sighted nature of the CAISO’s proposal.  This proposal, among other things, ignored:

• The resulting cost reductions to ratepayers, i.e., the benefits of the project withdrawals.  By focusing only on the “costs” to PTOs, and the upgrades assigned to the withdrawing projects, it completely disregards: (1) the fact that some of those upgrades will no longer be needed; but, more importantly (2) the rationale for the proposal – to allow removal of unneeded upgrades currently assigned to later-queued projects.  Overall, if the later-queued projects have to fund those unneeded upgrades, they will receive refunds, and thus ratepayers will ultimately fund them.

• SDG&E’s point at the WG5 meeting that PTO funding requirements in GIDAP Section 14.2.2 would only apply where withdrawing projects have executed GIAs – otherwise, the cost of their assigned upgrades could be assigned to later-queued projects.  SDG&E noted that 80% of old projects in the queue have GIAs, but the other 20% are probably more likely to drop out, and their upgrade costs would not be borne by the PTOs.  LSA agrees.

Finally, as LSA said at the WG5 meeting, the CAISO need not perform a separate study to implement this idea – instead, it could simply use the Reassessment process, which is already designed to account for the impacts of project withdrawals. 

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

Concepts:

Better information prior to submitting an Interconnection Request.  MRP strongly supports the CAISO providing, before an Interconnection Customer (“IC”) submits an Interconnection Request (“IR”), either (1) better information as to where interconnection capacity and deliverability are available, and projected to be available, within the CAISO Controlled Grid or (2) a “feasibility study” process that would give developers a reasonably reliable indication of their project’s ability to secure interconnection capacity and, ideally, deliverability.

Associated proposals: AES’s annual interconnection report (July 11 Presentation at slide 41); Vistra’s proposal for a new study process that would provide earlier information as to available interconnection capacity (July 11 Presentation at slides 88-94); and GridStor’s proposal to provide greater system information and visibility to inform ICs (July 11 Presentation, GridStor slide 2). And while Avantus’ proposal (July 11 Presentation at slide 107) involves providing an indication of deliverability during the development of the Phase 1 and Phase 2 studies, rather than MRP’s vision of providing an earlier indication of available interconnection capacity and deliverability prior to IR submittal, MRP supports it as consistent with the principle of providing better and more actionable information earlier in the interconnection process.   

Site Control.  MRP strongly supports requiring an IC to have and demonstrate site control at the time they submit an IR. (Nextera, July 11 Presentation at slide 70,)

Higher Fees.  MRP supports increasing the fees to submit an interconnection request.  Nextera also proposed, in addition to higher fees for submitting an IR, increasing the fees during the interconnection process (July 11 Presentation at slide 69), which MRP supports.  MRP also supports PG&E’s proposal for increasing fees during the interconnection process study process (July 11 Presentation at PG&E slides 3 and 4). 

Hiring additional staff to assist with processing IRs.  MRP does not dispute the CAISO’s and PTOs’ assertion that people that can perform the highly technical studies required in the interconnection process are in very short supply.  MRP offers, however, that hiring additional non-technical people could accelerate the administrative parts of the process (such as report writing and the processing of forms/applications and other non-technical tasks that are currently being performed by the technical staff). 

A one-time opportunity for projects to withdraw from the queue with full Interconnection Financial Security Release.  MRP supports this idea in concept (e.g., Large-scale Solar Association ("LSA") July 11 Presentation at LSA Slide 8) but remains concerned that there is not enough money “at risk” due to the current relatively modest fees relative to the potential payoff for successfully developing a project to motivate developers to take advantage of such an opportunity.

Expanding the list of changes that do not require a Material Modification Assessment.  MRP supports the LSA proposal to expand the list of changes (e.g., inverter changes) that do not require a Material Modification Assessment (“MMA”) (July 11 Presentation at LSA slide 4)..  While MRP acknowledges the issues associated with managing many MMAs, MRP strongly prefers this approach to other proposals to restrict the number of MMAs (e.g., SDG&E, July 11 Presentation at slide 120).   

Simplified technical models for the Phase 1 and Phase 2 studies.  MRP supports Southern California Edison’s proposal to use “generic” models in these studies. (July 11 Presentation at slide 127). 

Additionally, MRP is intrigued by two other proposals:

• Vistra’s proposal for a “subscription” model that would allow developers to fund network upgrades that would provide greater assurance of deliverability (July 11 Presentation at slides 94-96).  MRP also believes, however, that such a process would be complex, and likely should be deferred to a subsequent phase of interconnection process reform.

• Shell’s proposal for bilateral trading of queue positions (July 24 Presentation at slide 15).  As MRP envisions, this could be a way to address the current overloaded queue. MRP believes that such a proposal would likely have to be implemented only on a retroactive basis, as allowing for queue position trading would have the potential to increase the number of speculative projects as entities sought to establish and then monetize queue positions instead of developing viable projects.   MRP would like to see this proposal discussed further. 

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

MRP does not support the following concepts and proposals:

• Limiting the number of, or amount of capacity from, projects that can submit IRs. Such proposals (e.g., from Intersect Power, July 11 Presentation at slide 48) seem at odds with the concept of open access.   
   
• Prioritizing projects that provide Local Resource Adequacy capacity.  A fundamental principle in the current RA program is that local RA capacity always satisfies system RA requirements.  Discarding that principle as proposed by New Leaf Energy (July 11 Presentation at slide 50-55) – i.e., allowing the build-out of Local RA to where that capacity might not count towards system requirements because it was within a transmission-constrained generation pocket – would fundamentally change the nature of the RA program.  As such, any further consideration of this proposal would require a parallel conversation about its RA implications in a separate initiative – perhaps the upcoming RA enhancements initiative.  This proposal cannot be considered solely within the confines of the IPE 2023 Phase 2 initiative. 
   
• Standard land requirements for projects.  Nextera proposed standard minimum land requirements for projects (July 11 Presentation at slide 70).  While MRP thinks this proposal is headed in the right direction (i.e., towards requiring a developer demonstrate site control), MRP prefers PJM’s approach, which also includes allowing a Professional Engineer to certify that the proposed project will fit on the secured land in the event the project does not meet the minimum land requirements.

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

Additional thoughts:

Shared Network Upgrades.  As several entities noted, the current system in which a PTO will not proceed with constructing network upgrades that may be shared among several projects until all projects are ready to proceed can slow the deployment of projects.  Given the long lead time necessary for building transmission, MRP suggests consideration of a process by which (1) network upgrades can proceed when the first project that requires those upgrades is ready to give notice to proceed, and (2) socializing the cost of the upgrades if enough projects withdraw such that assuming the costs of the upgrades would threaten other projects’ economic viability.  MRP acknowledges that this is a complex and difficult topic but remains concerned that the long lead time required for transmission development will undermine the timely deployment of resources needed to meet state policy goals. 

Order No. 2023.  MRP notes that on July 28, 2023, FERC issued Order No. 2023, which directs many changes to the generator interconnection process.   Given that compliance filings are due 90 days after Order No. 2023 is published in the Federal Register, MRP respectfully requests that the CAISO timely inform the participants in this stakeholder initiative how the CAISO’s development of its Order No. 2023 compliance filing will affect the IPE 2023 Phase 2 initiative.

In conclusion, MRP wishes to emphasize three principles for interconnection reform:

• Provide more and better information earlier to project developers or conduct feasibility studies prior to submitting IRs.
• Increase interconnection process requirements – such as raising fees and requiring site control earlier in the process – to deter developers from submitting speculative projects.
• Require the CAISO and PTOs adhere to established interconnection process timelines and requirements (i.e., not allowing projects to linger in the queue).  MRP notes that Order 2023 includes financial penalties for transmission providers failing to adhere to established milestones.

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

New Leaf Energy, Inc. (“NLE”) appreciates the CAISO’s leadership in the time-intensive but valuable working group process, including the opportunity it has afforded stakeholders to present their own proposals. NLE thanks the CAISO again for the opportunity to present its proposals at the July 11, 2023 working group meeting. Below we offer comments regarding our Local Resource Adequacy (“RA”) proposals and a number of stakeholders’ proposals that address the interconnection request intake and queue management problem statements. 

The first section of the response to Question 1 covers NLE’s proposals that could address both problem statements. The proposals focus on three main concepts: (1) prioritizing projects sited in Local Capacity Areas (“LCAs”) within the proposed scoring criteria to select projects to study, (2) prioritizing these projects later within the transmission planning deliverability (“TPD”) allocation process, and (3) prioritizing projects with low distribution factors (“DFAX”) ratings (i.e., low impacts on transmission constraints). As explained further below, the Local RA proposals would recognize the combined benefits provided by such resources – enhancing reliability within LCAs and for the system overall. Additionally, the third concept – suggested by the CAISO in the Discussion Paper¹ – would maximize benefits from existing and approved transmission by increasing the resulting deliverability awards.

NLE is heartened by the positive response to its proposals, which have garnered support from load-serving entities, renewable energy developers, energy storage developers, and independent power producers. NLE has been actively seeking feedback from diverse stakeholders and welcomes continued engagement.

The second section of the response to Question 1 below covers NLE’s support for other stakeholder proposals to address the interconnection request intake problem statement, and the third section covers NLE’s support for other stakeholder proposals to address the queue management problem statement.

I. NLE’s Proposals to Prioritize Resources Providing Local RA

A. Creation of a Scoring Criterion for Resources Providing Local RA

NLE agrees with many stakeholders that a scoring rubric to prioritize which projects to study will likely be necessary, and NLE proposes that significant points be allotted to projects located in LCAs within that process. This proposal fits well within the CAISO’s proposals (e.g., Concept 1 in the Discussion Paper). 

For the yet-to-be-developed scoring rubric, NLE believes it is premature to suggest a specific number of points as the CAISO and stakeholders must consider how the adopted number relates to the total points available and the points available for other project attributes. However, NLE suggests that it should be a significant component of the rubric (e.g., similar to the 5 points of a possible 10, as discussed below in the context of TPD allocation). 

B. Prioritizing Resources that Provide Local RA within the TPD Allocation Process

To date, NLE has presented its proposals in concept only. Stakeholders have inquired about the specific number of points that NLE proposes should be awarded to projects sited in LCAs. NLE offers the following proposal specifics for further discussion and refinement, while reiterating that these details are less important at this point in the stakeholder process than continued consideration of the proposal itself. NLE seeks confirmation that the CAISO and stakeholders endorse this concept. Future discussions are needed to further scrutinize the details.

1. Proposed Points for Resources Sited in LCAs within the TPD Allocation Process

The existing scoring rubric for the TPD allocation process contains four categories of commercial readiness criteria: Permitting, Power Purchase Agreement Status for Group A only, Shortlist Status for Group B only, and Land Acquisition. Within each category, the rubric allots a minimum of 0 points (i.e., the minimum requirement to be considered for a given TPD allocation group) and a maximum of 10 points, as shown in the table below.²

NLE’s proposal would add a new column to this scoring rubric, in which a project that the CAISO verifies is sited in an LCA receives 5 points. This would achieve the appropriate balance of giving Local RA projects a meaningful boost in instances where there is less TPD available than megawatts (“MWs”) in a given TPD allocation group, while ensuring that the development maturity criteria that the CAISO is concerned about in problem statements 1 and 2 continue to have the highest value. NLE reiterates that the specific point value proposed is a starting point for further discussion. 

2. Justification for the Proposal to Prioritize Resources that Provide Local RA within the TPD Allocation Process

Prioritizing Local RA resources in the TPD allocation process would address the need for greater efficacy in the volume and location of interconnection requests (“IRs”) the CAISO studies.³ Giving points to resources in LCAs would help to meet state policy goals, as the retirement of thermal generation resources – many of which are serving as Local RA resources – is critical to meeting the state’s greenhouse gas reduction goals.⁴ Retiring these resources while maintaining reliability in LCAs is only possible if new clean Local RA resources are commercially available. Moreover, this proposal would meet reliability needs by increasing the potential pool of commercially viable resources located in LCAs, which are inherently more vulnerable during reliability events when System RA resources cannot always be counted on to serve load in LCAs. The CAISO has already adopted such scoring criteria for use in the TPD allocation process;⁵ a project’s Local RA attributes would be another strategic criterion to add to the existing scoring rubric for use when there are more projects in a given TPD allocation group than TPD available to award.

3. Addressing Questions Raised by the CAISO and Stakeholders about Prioritizing Resources that Provide Local RA within the TPD Allocation Process

a. Consideration of the CAISO’s Preference for Only Allocating TPD to Projects with PPAs

At the August 1, 2023 stakeholder meeting, the CAISO expressed its preference to award TPD to the first projects with power purchase agreements (“PPAs”).⁶ NLE interprets this to mean that  the TPD allocation groups would be eliminated, effectively creating a minimum criterion for TPD eligibility – that of presenting a qualifying PPA. Additional details and consideration by the CAISO and stakeholders is necessary to more fully evaluate this proposal. 

If the CAISO were to adopt a requirement for projects to have a PPA in order to apply for TPD, it would fundamentally remake the timing and nature of the LSEs’ procurement processes. It is not hard to imagine that more MWs of PPAs may request TPD than there are MWs of TPD available – especially since parties will have to contract before knowing if they have secured the most important component of their contract (i.e., the deliverability that the resource’s participation in the RA program is contingent on). As such, the scoring rubric would still be necessary, and NLE’s proposed priority for Local RA resources could then be applied if there are more MWs of PPAs requesting TPD than there are MWs of TPD available. 

b. Consideration of Local Capacity Area Deficiencies

Stakeholders have acknowledged that LCAs are not all similarly situated in terms of capacity. While some have sufficient resources, others are more resource-deficient. According to the most recent Local Capacity Technical Report, the amount of Net Qualifying Capacity (“NQC”) equals or exceeds the need in nine of the ten LCAs – all except Stockton – until 2032. By that year, the Greater Bay Area will also be deficient.⁷ This analysis might suggest that there is only a need to prioritize commercialization of Local RA resources in the Stockton LCA and the Greater Bay Area LCA. 

However, such a view misses the broader point: that a great proportion of the Local RA capacity available statewide is currently thermal generation that will have to retire in the years ahead – beyond the known retirements that are incorporated into today’s studies – if the state is to meet its greenhouse gas reduction goals. Just because an LCA has sufficient thermal generation does not mean that there is no need for new resources in those LCAs in the medium and long term; in fact, quite the opposite is true.

In order for existing thermal generators to retire while maintaining reliability, either new Local RA resources must come online or new investments must be made in transmission. With so many transmission investments needed in the years ahead for other policy- and economic-driven reasons, NLE considers that supporting the commercialization of new Local RA resources may be a better option. For new clean Local RA resources to come online, they must get the deliverability that allows them to qualify for the RA program. Only then can they compete with the incumbent generators – which, in the meantime, will reduce their market power and reduce ratepayer costs – and eventually supplant them. 

Finally, the proliferation of load-serving entities (“LSEs”) seeking waivers from their Local RA procurement obligations shows that this need is very real across the LCAs, even if there is not a documented deficiency.⁸ Therefore, NLE recommends that points be awarded in the TPD allocation process – and as a criterion to prioritize which projects to study – for any project sited in an LCA, regardless of whether that LCA appears resource-deficient within today’s analyses. 

c. Consideration of Recent Procurement Orders

Stakeholders have noted that the many recent procurement orders from the California Public Utility Commission (“CPUC”),⁹ totaling 15,500 MWs, have been for specific quantities of NQC. They have not specified that Local RA specifically be procured. This might be viewed to suggest that there is not a need to procure new Local RA resources. However, prioritizing Local RA resources in the TPD allocation process would not in any way limit the volume of NQC available to the LSEs pursuant to their procurement orders. Under the current methodology, all RA resources – whether System or Local – must be deliverable to the aggregate of load. As such, any Local RA resource can bid as System RA – though of course the reverse is not the case. As such, prioritizing Local RA in the TPD allocation process would not limit the amount of NQC that could bid into any LSE solicitation pursuant to the procurement orders, it would just increase the volume of resources with Local RA attributes that are doing so.

d. Consideration of Ability to Charge

Stakeholders have questioned whether there is sufficient energy to charge storage resources proposed within LCAs. However, the CAISO has robust processes for ensuring reliability via the Transmission Planning Process (“TPP”). If energy adequacy for storage charging in LCAs becomes a more pressing issue in the near term, which does not seem likely, the TPP and other forums could modify or tweak the approach. For example, the CAISO, the CPUC, and stakeholders could address the issue through the CPUC’s portfolio development and busbar mapping process and in the Local Capacity Technical Study process, when approving transmission to accommodate the CPUC’s portfolios and busbar mapping. With the range of critical issues the CAISO must address on a tight timeline in the IPE initiative, this is not the proper venue to consider this potential issue.

C. Prioritizing Resources with Low DFAX Ratings within the TPD Allocation Process

NLE continues to support the CAISO’s proposal to utilize DFAX in the TPD allocation process. This proposal would provide a boost to projects that have the least impact on grid congestion (i.e., the lowest DFAX scores) and, therefore, allow larger MW quantities of TPD to be awarded on the same transmission infrastructure.¹⁰ Doing so would allow the CAISO to prioritize the projects that do the least harm on the system from a reliability perspective, increase the amount of resources that can participate in the RA program without transmission system upgrades, and maximize the RA benefit from newly approved upgrades. 

Similar to the proposed points for resources sited in LCAs, NLE offers the following details as a starting point for further discussion and refinement. Continued consideration of the concept is more important at this stage in the stakeholder initiative than the specific points discussed below. NLE once again seeks confirmation that this concept belongs within the IPE and offers these proposed specific point values for consideration in subsequent discussions. 

As with our Local RA proposal concerning TPD allocation, NLE suggests adding a new column to the scoring rubric from the Business Practice Manual (“BPM”) for Generator Interconnection and Deliverability Allocation Procedures, Section 6.2.9.4.2, shown above. NLE proposes that the CAISO rank projects in each area – based on a project’s combined DFAX ratings – and then award points to the lowest ranking projects. NLE recommends that projects in the top quarter ranking receive 5 points; projects ranking in the second quarter (i.e., 25-50 percent) receive 3 points; projects ranking in the third quarter (i.e., 50-75 percent) receive 1 point; and all others receive 0 points. 

Alternatively, the CAISO could consider awarding points based on the average of a project’s DFAX ratings rather than its relative DFAX ranking. Under this approach, projects with the lowest average DFAX rating of 0-5 percent would receive 5 points; those with an average DFAX rating of 5-10 percent would receive 4 points; those with an average DFAX rating of 10-15 percent would receive 3 points; those with an average DFAX rating of 15-20 percent would receive 2 points; those with an average DFAX rating of 20-25 percent would receive 1 point; and all others would receive 0 points. 

Additionally, the data needed to support the application of this framework could be included in the CAISO’s proposal to publish substantially more information prior to the submission of IRs – supported by AES Clean Energy,¹¹ Middle River Power,¹² and GridStor.¹³ NLE agrees this could be extremely useful to guide project development at the most high-value locations and proposes that such a report could include the DFAX rating for each point of interconnection (“POI”) as it relates to known, binding constraints within the CAISO’s target zones.

D. Updating the BPM to Implement NLE’s Proposed Modifications to the TPD Allocation Process Could Be Done in Q1 2024

It is important for the CAISO to move quickly to adopt proposals with a positive impact that have a pathway for rapid implementation, while continuing to consider more complex related concepts that require more time to develop, refine, and implement – in this and other stakeholder initiatives.

The CAISO Tariff Appendix DD Section 8.9.2.1 lays out the project attributes that Interconnection Customers must attest to in their deliverability affidavits, including permitting status, project financing status, and land acquisition status.¹⁴ The BPM for Generator Interconnection and Deliverability Allocation Procedures Section 6.2.9.4.2 expounds upon the scoring methodology in greater detail.¹⁵

The CAISO could consider implementing NLE’s proposals to incorporate new criteria within the TPD allocation scoring rubric through an update of the BPM, rather than waiting to modify the tariff. The CAISO would be the entity to make the determination as to whether a given project was sited in an LCA or not and would be the entity to determine the project’s DFAX rating. This would require no changes to the IC’s affidavit and, as such, it may be possible for the CAISO to implement these changes to the TPD allocation process without altering the tariff.  

With the current track of the IPE initiative proposed to conclude in February 2024, the CAISO could expedite the short-term benefits of NLE’s proposals by ensuring that the BPM modifications were implemented quickly, before the TPD process results are posted on May 31, 2024, as adopted in Track 1 of this initiative.¹⁶ Given the uncertainty surrounding the timeline for Cluster 15 and beyond, the Spring 2024 TPD allocation process may be the last one with a significant amount of new generation – namely, Cluster 14 projects that have recently received their Phase II study results – for quite a while. Indeed, with Cluster 14 projects able to enter the Spring 2024 TPD allocation process, it is possible that some of these projects will be able to meet the Mid-Term Reliability (“MTR”) procurement timelines. It will benefit offtakers, and ultimately ratepayers, to have a larger pool of projects participating in these solicitations.

II. NLE’s Support for Proposals to Address Problem Statement 1 Regarding Interconnection Request Intake

NLE supports several proposals to address the first problem statement aimed at reducing the number of IRs the CAISO receives. First, NLE supports the CAISO’s creation of more stringent eligibility requirements in order to prevent overly speculative projects from entering the queue. NLE proposes that the CAISO align its queue entry requirements with other ISOs and require Site Control without an in lieu of deposit option. At minimum, the CAISO should require 90 percent Site Control, which would provide some flexibility for project-specific issues.¹⁷ Regardless of the adopted site control requirement, the CAISO should not provide an in lieu of deposit option, which would allow overly speculative projects to enter the queue. Sufficient progress on land acquisition should be the floor for the CAISO to consider a project viable and to allow it to enter the queue.

To further reduce the number of IRs received, NLE supports proposals by AES Clean Energy and Avantus urging the CAISO to publish data that would assist developers in evaluating whether projects are viable. We applaud the CAISO’s presentation at the August 1, 2023 stakeholder workshop where the CAISO proposed to increase data transparency by providing: zonal information, transmission constraints within zones, allocated deliverability within zones, public queue data, and a heat map. The CAISO should also publish data showing what POIs are located in LCAs and on each POI’s DFAX as it relates to known, binding constraints within the target zones. If the CAISO has concerns with making any of this grid information public, it can use the market participant portal to host the data.

Finally, NLE supports proposals by GridStor, LSA, Middle River, and NextEra for the interconnection process to utilize advanced technology and automation. This represents a significant opportunity to reduce staff resources during interconnection request intake process – one of the CAISO’s main objectives in this initiative.

III. NLE’s Support for Proposals to Address Problem Statement 2 Regarding Queue Management

NLE supports several proposals to address the second problem statement concerning queue management. First, NLE supports the development of scoring criteria to rank projects and determine which ones the CAISO will study. To clarify, NLE urges the CAISO against applying the scoring criteria during the interconnection request intake stage. Instead, an increased Site Control requirement, discussed above, should be the only limitation placed on queue entry.

NLE believes AES Clean Energy’s proposal is a good starting point to develop the scoring criteria, but stakeholders should work together in a subgroup of the IPE initiative to finalize the scoring criteria and the points awarded for each criterion. NLE supports GridStor’s proposal to prioritize resources sited in locations with local capacity shortfalls, having faster construction timelines, and exhibiting other characteristics needed to meet state needs or goals. Specific criteria that NLE supports at this time include: (1) whether a project is sited in an LCA, as discussed above, (2) whether a project is sited in an energy community or Disadvantaged Community (“DAC”), and (3) permitting – with projects that have progressed farther in the permitting process receiving more points, as is currently done currently in the CAISO’s TPD allocation groups. 

Additionally, NLE supports LSA’s proposal to supplement the initial project study list/ranking with an appeals process to consider other desirable project attributes. Both LSEs and developers should have the opportunity to submit an appeal to argue why the CAISO should include a specific project in the study list. This would provide flexibility for the CAISO to consider studying projects that may not rank highly under the scoring criteria but are nevertheless valuable projects to study.

Regarding proposals to reform the study process, NLE is agnostic regarding whether the CAISO adopts its single-phase study approach or other stakeholders’ proposals for a multi-phase study that utilizes a generic study at some point in the process. Regardless of which approach the CAISO moves forward with, NLE urges the CAISO to adopt the following recommendations. First, the CAISO should postpone validating individual projects until after it determines which projects to study – in order to reduce staff time spent on this onerous function. Second, NLE supports providing interconnection facilities cost estimates during the Scoping Meeting to encourage less viable projects to exit the queue early in the process. Finally, NLE urges the CAISO to refund deposits if upgrade costs escalate significantly above initial estimates. Eliminating Phase 1 or adopting a generic Phase 1 study process will result in less certain interconnection cost estimates. Recognizing that cost estimates will have a larger range and be less reliable under either of the new study approaches, this proposal would encourage developers to withdraw any projects that they find are no longer viable.

Next, NLE supports LSA’s and Rev Renewables’ proposals to reform Option B to make it a more fair and viable alternative study pathway. Specifically, the CAISO should allow Option A projects that are not awarded deliverability to elect Option B, fund area deliverability network upgrades (“ADNUs”) themselves or with other projects, and receive a higher TPD allocation priority in the next TPD cycle. The CAISO should also provide projects an opportunity to revert from Option B back to Option A if ADNU costs escalate. Additionally, although the CAISO indicated that Vistra’s proposal to create a network upgrade subscription model is outside of the scope of the IPE initiative at this time, NLE conceptually supports this proposal. Having the CAISO administer the process to crowdfund upgrades would create a more workable Option B framework.

NLE additionally supports the CAISO’s proposal at the August 1, 2023 workshop to create both additional project milestone requirements and a regular process to receive and evaluate milestone updates – also supported by Vistra and Gridwell. NLE suggests that one new project milestone requirement could be requiring 50 percent gen-tie site control following the first, or perhaps only, study phase – with an in lieu deposit option that would fund upgrade costs.

Regarding Material Modification Assessment (“MMA”) requests, NLE continues to support LSA’s and Gridwell’s proposals to expand the list of changes in the BPM for Generator Management that do not require MMAs (e.g., inverter changes and gen-tie combinations, which the CAISO nearly always approves in its current process). The CAISO should allow developers to enter these changes into the Resource Interconnection Management System (“RIMS”) or, alternatively, create an automated process for accepting these types of modifications. If the CAISO determines that there are issues with certain modifications (e.g., inverter changes), it could reserve the right to require an MMA and later adjust the list of modifications requiring MMAs. 

NLE also supports Clearway’s proposal to require a joint meeting with the CAISO, the relevant participating transmission owner (“PTO”), and the developer to address validation issues within 15 calendar days of MMA submission. The proposal would allow these entities’ engineering teams to expeditiously address any validation issues. Further, NLE supports LSA’s and Vistra’s proposals to increase MMA timing certainty by adopting targets for the CAISO’s and PTOs’ initial and subsequent validation reviews. Lastly, NLE supports Clearway’s proposal to allow MMAs to proceed separately from the Limited Operation Study process.

Concerning deliverability, if the CAISO decides to modify the TPD allocation process – as proposed during the August 1, 2023 workshop – to award deliverability to projects as they receive PPAs, a revised process with a standard cadence (e.g., quarterly) should utilize a TPD scoring rubric similar to the current one in order to prioritize projects that have received PPAs. If more projects have PPAs during the quarterly TPD allocation process than there is deliverability to award, projects with more points (e.g., those in LCAs under NLE’s proposal described above) would receive deliverability awards over those with fewer points.

Finally, NLE strongly supports LSA’s proposal for a one-time queue withdrawal opportunity in order to allow projects to exit the queue voluntarily and receive refunds for all posted financial security. NLE is sympathetic to arguments that this could lead to increased costs in the short term if projects currently responsible for approved upgrades exit the queue, but the reduced need for future developer/ratepayer funding for unneeded upgrades would outweigh the costs of any refunds. If the CAISO decides against providing a one-time withdrawal opportunity, it would miss the single largest opportunity to relieve queue congestion and ensure that only the most viable projects remain in the queue.

¹ 2023 Interconnection Process Enhancements Track 2 Discussion Paper (May 31, 2023), p. 12-13, available at: http://www.caiso.com/InitiativeDocuments/Discussion-Paper-Interconnection-Process-Enhancements-2023-Track%202-May312023.pdf. 

² CAISO Business Practice Manual: Generator Interconnection and Deliverability Allocation Procedures v33 (April 26, 2023), Section 6.2.9.4.2 (p. 107-109), available at: https://bpmcm.caiso.com/Pages/BPMDetails.aspx?BPM=Generator%20Interconnection%20and%20Deliverability%20Allocation%20Procedures.

³ 2023 Interconnection Process Enhancements Summary of June 20 & 21 Track 2 Working Group Meeting Revised Principles and Problem Statements 1 and 2 (June 23, 2023), p. 4, available at: http://www.caiso.com/InitiativeDocuments/Revised-Principles-and-Problem-Statements-Interconnection-Process-Enhancements-2023-Track%202-Jun%2020-212023.pdf.

⁴ SB 100 (de León, 2018) increases the RPS to 60 percent by 2030 and requires all the state's electricity to come from carbon-free resources by 2045. Available at: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB100.

⁵ CAISO Business Practice Manual: Generator Interconnection and Deliverability Allocation Procedures v33 (April 26, 2023), Section 6.2.9.4.2 (p. 107-109), available at: https://bpmcm.caiso.com/Pages/BPMDetails.aspx?BPM=Generator%20Interconnection%20and%20Deliverability%20Allocation%20Procedures.

⁶ 2023 Interconnection Process Enhancements Track 2 Working Group (August 1, 2023), p. 21, available at: http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-Track-2-Aug12023.pdf.

⁷ 2022-2023 Transmission Plan (Board Approved), Appendix J, p. J-3 to J-4, available at: http://www.caiso.com/InitiativeDocuments/Appendix-J-Board-Approved-2022-2023-Transmission-Plan.pdf.

⁸ CPUC Local Waivers Issued (2018-2022) (accessed July 31, 2023), available at: https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/electric-power-procurement/resource-adequacy-homepage/local-waviers-issued.

⁹ CPUC Decision 21-06-035 (June 30, 2021) ordered the procurement of 11,500 MW of new NQC to come online in 2023-2026 (see Ordering Paragraph 1, available at: https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M389/K603/389603637.PDF). CPUC Decision 23-02-040 (February 28, 2023) ordered an additional 4,000 MW NQC of new procurement in 2026 and 2027 (see Ordering Paragraph 2, available at: https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M502/K956/502956567.PDF). 

¹⁰ 2023 Interconnection Process Enhancements Track 2 Discussion Paper (May 31, 2023), p. 12-13, available at: http://www.caiso.com/InitiativeDocuments/Discussion-Paper-Interconnection-Process-Enhancements-2023-Track%202-May312023.pdf. 

¹¹ 2023 Interconnection Process Enhancements Track 2 Working Group, (July 11, 2023), AES Interconnection Intake Proposal, p. 41-42, available at: http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-2023-Track%202-Working-Group-Jul112023.pdf.

¹² 2023 Interconnection Process Enhancements Track 2 Working Group, (July 11, 2023), Middle River Power CAISO IPE 2023 Phase 2 Proposals, p. 112-113, available at: http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-2023-Track%202-Working-Group-Jul112023.pdf.

¹³ 2023 Interconnection Process Enhancements Track 2 Working Group, (July 11, 2023), GridStor CAISO IPE Track 2 Working Group, p. 136, available at: http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-2023-Track%202-Working-Group-Jul112023.pdf.

¹⁴ CAISO Tariff, Appendix DD, Section 8.9.2.1 (p. 65-66), available at: http://www.caiso.com/Documents/AppendixDD-GeneratorInterconnectionDeliverabilityAllocationProcedures-asof-Mar28-2023.pdf.

¹⁵ CAISO Business Practice Manual: Generator Interconnection and Deliverability Allocation Procedures v33 (April 26, 2023), Section 6.2.9.4.2 (p. 107-109), available at: https://bpmcm.caiso.com/Pages/BPMDetails.aspx?BPM=Generator%20Interconnection%20and%20Deliverability%20Allocation%20Procedures.

¹⁶ CAISO Tariff, Appendix DD, Section 16.1(h) (proposed revisions submitted to FERC on June 2, 2023), available at: http://www.caiso.com/Documents/Jun2-2023-TariffAmendment-InterconnectionProcessEnhancements2023-Track1-ER23-2058.pdf. 

¹⁷ FERC Order 2023, Improvements to Generator Interconnection Procedures and Agreements, requires 90 percent Site Control, eliminates deposits in lieu, and requires 100 percent Site Control at the facilities study and Large Generator Interconnection Agreement stage. FERC Order 2023, paragraphs 594 and 600, Docket No. RM22-14-000 (July 28, 2023), available at: https://elibrary.ferc.gov/eLibrary/filelist?accession_num=20230728-3060. 

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

I. NLE’s Concerns with Proposals to Address Problem Statement 1 Regarding Interconnection Request Intake

Regarding the first problem statement aimed at reducing the number of IRs the CAISO receives, NLE is concerned with proposals to restrict the number of IRs or MWs the CAISO studies in each cluster. Instead of imposing an arbitrary limit on applications eligible for study, the CAISO should limit the number of projects studied through the creation of effective viability criteria, discussed above. 

The viability criteria would serve to prioritize applications for study. Because the CAISO cannot feasibly study all applications submitted, it should only study IRs with the highest viability scores. The CAISO should rank projects for study in each of the target zones and study those with scores above a predefined viability threshold first. If additional MWs are needed in any of the target zones after the initial study due to project attrition, then the CAISO should study the next highest ranked project(s) needed to meet the capacity deficiency in a given zone. Even with the CAISO’s proposed IPE reforms, project attrition will continue to occur later in the interconnection and TPD allocation processes – for reasons including permitting, unforeseen cost increases (e.g., COVID supply chain issues), changes to federal policy (e.g., solar import tariffs), and changes to state policy (e.g., solar property tax laws). 

Further consideration is needed in a subgroup of the IPE, discussed above, to consider implementation details for the scoring criteria. Additionally, the CAISO and stakeholders should revisit the scoring criteria after their application to Cluster 15 in order to evaluate their effectiveness and determine if any modifications are necessary.  

II. NLE’s Concerns with Proposals to Address Problem Statement 2 Regarding Queue Management

NLE is concerned with three proposals to address the second problem statement regarding queue management. First, Savion/Shell’s proposal to create a process to trade queue positions bilaterally would lead to unintended consequences. NLE cautions that this proposal may incentivize more speculative queue entry, which could lead to entities securing and holding queue positions to later extract profit from more viable projects. Further, under the CAISO’s current process, developers may transfer queue positions by selling a project to another developer in its entirety. This proposal is therefore unnecessary and could cause more queue congestion.

Second, NLE is concerned with the CAISO implementing a specific deadline (e.g., ten years) for projects to remain in the queue. Instead of specifying the number of years a project can remain in the queue, requiring demonstrations of continued progress towards meeting development milestones at set intervals would better serve to ensure only viable projects remain in the queue. Additionally, certain technologies, locations, or late-discovered issues may necessitate projects remaining in the queue beyond a set number of years. Substantial harm would result for projects that can demonstrate project viability but are forced to exit the queue due to an arbitrary deadline.

Lastly, NLE opposes requiring a 100 percent third security posting prior to executing a Generator Interconnection Agreement (“GIA”). This proposal would require developers to effectively make a unilateral commitment without any PTO contractual commitment to construct upgrades and/or meet a particular timeline. The proposal could also undermine recent changes to allow developers to postpone GIA execution based on the longest lead-time upgrade. An acceptable compromise could instead require an additional posting, between the current second and third posting, that is higher than the 30 percent second posting but less than the 100 percent third posting. This would provide the desired increase to a project’s financial commitment after developers receive more certain cost estimates and timing parameters.

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

NLE does not have additional comments on suggested modifications to the proposals beyond our responses to questions 1 and 2 above. NLE reiterates its appreciation for the CAISO’s work on these essential interconnection reforms, which are necessary to ensure California meets its clean energy goals.

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

NextEra Energy Resources, LLC (“NextEra Resources”) appreciates the opportunity to comment on the CAISO’s Interconnection Process Enhancements (“IPE”) – Track 2 July 2023 Workshops.  In the absence of a formal straw proposal, these comments are intended to provide CAISO staff with an initial reaction to the concepts that have been presented thus far and an appraisal of those reform concepts that should be prioritized.

Financial Commitments and Commercial Readiness

Consistent with NextEra Resources presentation in the IPE workshop on July 11, 2023, and with the Federal Energy Regulatory Commission’s (“FERC”) recently issued Order No. 2023, a lack of meaningful financial commitments, an absence of commercial readiness requirements, and minimum requirements to demonstrate site control  have led to an excessive number of  interconnection requests that have resulted in interconnection queue backlog and delays.[1]  As such, NextEra Resources maintains that the CAISO should prioritize increasing financial commitments and commercial readiness requirements by implementing:

1. A new, non-refundable entry fee.

NextEra Resources proposes adopting a mandatory non-refundable $100,000 fee to be paid by developers to enter the interconnection queue. This mandatory fee will deter more speculative projects as currently there is essentially a free option to enter the queue, provided that a project withdraws within 30-days following the scoping meeting.

2. Higher study deposits based on project size with limits on refundability.

Currently, the CAISO tariff requires developers to submit a $150,000 study deposit when an application is submitted to enter the queue, which is 100% refundable.[2] This is a low threshold when compared to overall project costs. Moreover, since interconnection customers are reimbursed for network upgrades, the CAISO market should have a higher tolerance for security deposits than other RTO markets. As such, NextEra Resources proposes adopting a model that has worked in SPP’s interconnection process to decrease queue congestion, whereby the developer must pay a per MW deposit.[3]

NextEra Resources proposes that the CAISO adopt an $8,000/MW study deposit requirement, which is only 100% refundable until 30-days after the initial scoping meeting, or before the start of Phase 1 studies, whichever comes first.  This proposal would allow the developer to withdraw a project a month after the initial scoping meeting should it receive information at the meeting that makes it clear the project is not viable.  Otherwise, to stay in the process, the developer’s non-refundable financial commitments will increase, forcing a more critical assessment of whether to remain in the queue. 

3. Higher deposits for network upgrades and interconnection facilities and more stringent commercial readiness requirements to obtain deliverability.

Currently, projects must post a deposit reflecting 15% of upgrade costs as determined in Phase 1 and then 30% of such costs as determined by the Phase 2 study.[4]Securing network upgrades are critical to ensuring that resources are able to deliver their output to meet system demands. The amounts required for upgrade deposits should be increased and should be increasingly non-refundable as projects move through the study process. NextEra Resources proposes increasing the Phase 1 posting to 25% of upgrade costs and increasing the Phase 2 posting to 50% of upgrade costs. In both cases, 50% of the network upgrade costs would be refundable and 100% of the interconnection facilities deposit would be refundable, less any costs actually incurred by the transmission owner, if the developer later exits the queue. Increasing these posting amounts will ensure that developers are more committed at points when they have additional information from which to base such decisions. Steadily increasing one’s financial risk throughout the process can be effective in ensuring only that serious, viable projects remain in the queue.

Additionally, with respect to the criterion for applying for deliverability based on having executed a contract with a load serving entity (“LSE”), FERC recently approved a CAISO proposal that requires a minimum 5-year contract term for Resource Adequacy (RA) and allows for a $10,000/MW fee in lieu of meeting the contract execution requirement.[5]  It should be noted that new renewable generation projects require long-term contracts for financing. Therefore, to support new generation, developers should have an RA capacity contract of at least 10 years to apply to the CAISO for deliverability. Increasing the contract term to at least 10 years is consistent with the requirement that 65% of LSE renewable portfolio standard compliance must be met from contracts 10 years or longer.[6] The minimum fee in lieu-of having an executed contract should also be increased to $20,000/MW to reflect the significant value of deliverability.

4. More stringent site control requirements.

As noted in FERC Order 2023, adding more stringency to site control requirements will also help to ensure that commercially viable interconnection requests will be able to enter the queue and that an interconnection customer that has secured the exclusive land rights necessary to construct its proposed generating facility is sufficient evidence of the interconnection customer’s commitment to construct the generating facility.[7]  NextEra Resources strongly agrees with the Commission’s assertions and has previously proposed that the CAISO adopt the minimum acreage requirements for the generating site that SPP uses in its Site Control determination.[8]  However, given that FERC Order 2023 also requires 90% site control for the generating facility at the time of submission of the interconnection request and evidence of 100% site control for the generating facility at the time of execution of the facilities study agreement and when executing the LGIA, NextEra Resources seeks clarification from the CAISO as to whether the current Site Exclusivity requirements in Appendix A of the CAISO Tariff are sufficient.  The CAISO’s current Site Exclusivity requirements do not align with the acreage requirements to enter the queue under FERC Order 2023, and the Commission has found that a deposit in lieu of site control for all interconnection customers (except in limited circumstances where an interconnection customer demonstrates a regulatory limitation) should no longer be an option.

Transmission Plan Deliverability Allocation:

5. Equal treatment of Cluster 13 projects with regard to deliverability allocation as compared to Cluster 14 projects.

Obtaining deliverability status within the interconnection process ensures that a project can  be counted in a Supply Plan to provide Resource Adequacy Capacity. Deliverability status is important to obtain because it ensures that a project with energy storage remains economically viable. Under the current CAISO tariff, within the same deliverability allocation group, even if a Cluster 13 project that converted to Energy-Only (“EO”) receives a higher Table 2 affidavit score than a Cluster 14 project, the Cluster 14 project receives a higher allocation priority. This undermines the objective of advancing and prioritizing deliverability allocation for more mature projects that are further along in both permitting and commercial milestones and contradicts the “first ready, first served” reform principles under FERC Order 2023.

NextEra Resources strongly encourages the CAISO to treat Cluster 13 projects fairly in terms of access to deliverability given that the majority of Cluster 13 projects were allocated 0% deliverability (due to being evaluated prior to the CAISO’s most recently approved TPP upgrades) and were forced to convert to EO to remain in the queue, despite being further along in maturity.

[1] Order No. 2023, 184 FERC ¶ 61,054 (2023)

[2] CAISO Tariff, Appendix A (2023)

[3] SPP Tariff, Attachment V, 8.2 (2022)

[4] CAISO Tariff, Appendix DD, 11 (2023)

[5] U.S. Federal Energy Regulatory Commission, Docket No. ER23-941-000, California Independent System Operator Corp., Tariff Amendment to Implement Interconnection Process Enhancements (March 27, 2023)

[6] CA Public Utilities Code § 399.13(b) (2015)

[7] Order No. 2023, 184 FERC ¶ 61,054 at P 585(2023)

[8] Jim Shandalov, NextEra Energy Resources (2023),“2023 Interconnection Process Enhancements” Presentation, July 11, 2023. 

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

1) Single Phase Study Approach:

CAISO recently introduced the concept of a single-phase study process, which would be contingent upon sufficiently “limiting” the number of projects and capacity in the queue to ensure that the process would be efficient and enable meaningful study results.  It remains unclear to NextEra Resources how CAISO would limit the number of projects, and without more detail, the viability of this concept is difficult to ascertain.

2) Transmission Plan Deliverability (“TPD”) Transfer limitations:

It’s unclear to NextEra Resources why CAISO is considering TPD transfer limitations based on the historically limited number of EO projects that have achieved a Commercial Operation Date (“COD”).  If CAISO is assessing whether a project transferring TPD should be withdrawn from the queue upon approval of a transfer request, CAISO appears to be operating under an assumption that an EO project will rarely (if ever) come to fruition.  However, using historical statistics to inform such a proposal overlooks the fact that the CAISO has not experienced a deliverability shortage until recent years.  Moreover, the CAISO has not made any meaningful distinction between the transfer of full or partial deliverability.  For example, if a project has 250MW of TPD and it transfers 25MW of that TPD to another project, it seems unreasonable to assume that the project transferring TPD should be withdrawn from the queue.  Furthermore, if transfer requests for projects already under construction have never been requested, it’s unclear how a proposal that prohibits transfer requests once a project starts construction provides any additional relief to queue management. 

3) Auctions:

The concept of an auction to allow interconnection customers to buy/sell queue positions introduces a level of complexity that concerns NextEra Resources.   Many details associated with the mechanics of an auction, the allocation of auction proceeds, additional administrative costs associated with its operation, and how layering auctions with transmission planning remain to be seen.  Also, it’s unclear how creating a market for queue positions would prevent entities from hoarding positions to increase prices and maximize proceeds.  Given the limited amount of time the CAISO has to implement process changes ahead of the Cluster 15 Phase I studies, NextEra Resources encourages the CAISO to prioritize reform changes that are practicable on such a condensed timeline. 

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

1. Material Modification Assessments (“MMA”):

MMAs are required in the interconnection process primarily to address technology changes that occur between the time of the interconnection request submission and ultimate completion of the interconnection process. In many instances, the version of generation technology that was submitted with the original request is no longer available and out of date after several years elapse while the interconnection request is studied; therefore, an MMA application needs to be submitted to address the technology change. It should also be noted that in most instances, the newer generation technology (for example, inverter or turbine type) has greater technological capability and/or reliability and ancillary services capability. CAISO has proposed limiting the number of MMA requests allowed on an annual basis and increasing the time to process modifications from 45 days to 60 Days.  However, between 2017 and 2022, most CAISO MMA requests were ultimately approved and the current (average) time it takes to complete MMAs greatly exceeds the proposed 60-day extension.  If there is little risk that MMA requests will be denied (as evidenced by the volume of historical approvals that were highlighted by stakeholders[1]) and delays are creating downstream impacts to projects that can’t achieve COD until an MMA is completed, NextEra Resources strongly encourages CAISO to explore some combination of the proposals made by LSA, Clearway, and Gridwell Consulting to simplify the MMA process, rather than to limit the number of MMA requests that can be made by interconnection customers.  For instance, some recognition that inverter changes (which are granted nearly 100% of the time) should be assumed “approved” while more complex interconnection facilities changes should be subject to a more intensive review and require a higher deposit. Finally, the use of consultants for the completion of MMA studies should be encouraged to alleviate the time and effort by existing CAISO staff who are focused on existing interconnection studies. 

2. One-Time Withdrawal:

NextEra Resources has previously proposed allowing developers to have a one-time, risk-free exit from the queue considering the new requirements strike the right balance of clearing the queue with less risk to developers. However, CAISO’s proposal to shift all cost responsibility due to withdrawals to any current or later-clustered project(s) and to waive all inherent cost responsibility on the part of Participating Transmission Owners (“PTO”) warrants further discussion.  As noted by some stakeholders in the August 1, 2023 stakeholder meeting, CAISO’s proposal seems to ignore the potential cost benefits to all parties (developers and PTOs) if projects dropped from the queue result in the need for previously identified network upgrades to diminish.  If there are scenarios where PTOs will no longer have to fund network upgrades, it’s unclear to NextEra Resources why PTOs should not share in any potential cost responsibility for other scenarios where the scope increases.  Additionally, while NextEra Resources recognizes that any change to network upgrades is ultimately reimbursable, it’s worth considering whether a project’s cost share should be capped at the Reliability Network Upgrade (“RNU”) reimbursement cap for a given queue position.  Otherwise, if one of these withdrawals forces a project’s share of RNU to exceed the project’s reimbursement cap, it could pose a significant obstacle to the project meeting its existing commercial arrangements.

[1] Raeann Quadro, Gridwell Consulting (2023),“IPE 2023 Working Group 4 Proposals” Presentation, July 24, 2023. 

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

NCPA General Comments:

NCPA appreciates the opportunity to comment on the IPE23 working groups and the problem statements, concepts and principles developed therein. NCPA also recognizes the significant amount of work put into the formulation of the many proposals presented at the workshops. Many of them contain elements that NCPA believes can be incorporated into a successful proposal.

The CAISO originally described this initiative as intended to tighten the linkages among resource and transmission planning activities, interconnection processes and resource procurement.[1] During the workshops, CAISO and the stakeholders developed principles for reaching a proposed solution. As a load-serving entity (LSE) that owns and contracts for generation to serve its members’ ratepayers, NCPA strongly supports Principle 5:[2]

Enhance the interconnection process’s ability to support the procurement necessary to meet California Public Utilities Commission (CPUC) resource portfolios and California Energy Commission (CEC) SB100 portfolios, and portfolios established by non-CPUC jurisdictional LRAs.

Principle 2[3] is similar:

Ensure meaningful study results that take into account system capability, resource planning and procurement [of all LRAs engaged in resource planning].

NCPA is a non-CPUC jurisdictional joint action agency serving its non-CPUC jurisdictional member utilities who engage in their own planning and resource procurement under the supervision of their respective Local Regulatory Authorities (LRA).  NCPA begins with its own view of how these principles can be translated into a workable set of IPE23 Enhancements that serves the needs of NCPA’s ratepayers. NCPA’s starting point is that CAISO load ultimately pays for all transmission upgrades necessary to connect resources to the grid. Several points flow from this foundation:

• The Interconnection Process, the Transmission Planning Process (TPP), the deliverability requirements and all processes addressing the planning of the grid and the interconnection of resources must facilitate the ability of load-serving entities (LSE) to procure the resources they need to serve load and meet regulatory requirements. Load needs a voice in all these processes. For example, NCPA believes that the excessive backlog in the current cluster process is not a function of generators seeking to participate in the CAISO markets as merchant generation; rather, the excessive backlog of interconnection applications is being squarely driven by various governmental mandates and the carbon reduction goals of LSEs and their respective LRAs.

• These processes must support the procurement needs of all load, and of all LSEs, whether the LSEs are FERC- or CPUC-jurisdictional or overseen by an LRA. Failure to include the resource needs of all LSEs would be unduly discriminatory pursuant to the Federal Power Act. NCPA appreciates CAISO’s recognition of this concept as the principles have evolved.

• NCPA does not object to CAISO’s concept of encouraging projects to locate in zones where transmission capacity exists or has been approved, but the universe of potential project locations cannot be limited to zones designated solely by the CPUC. For example, most of the CPUC zones are in the south, while NCPA’s member loads and generation are located in the north, where transmission constraints often preclude the transfer of southern generation to the north. Some of this will be addressed in the TPP, but all LSEs must be able to both plan and interconnect resources where they are needed.

• NCPA supports strong requirements for site control demonstrations for reducing speculative projects and supporting projects of LSE interest through commercial viability requirements.

• Because load ultimately pays for all transmission upgrades, no CAISO process should create a severable property right in transmission deliverability for any entity other than the right to use deliverability for which a project developer has provided the up-front financing. Neither deliverability nor queue positions should be property rights to be sold to the highest bidder. The right to use the transmission system should not be a source of market power.

The FERC Final Rule on Interconnection Process Reform[4] should serve as a floor for new interconnection process (IP) requirements. However, while the rule does prescribe certain reforms, it also left the door open for alternative proposals and independent variations in areas where FERC lacked a sufficient record to rule or believed that it was more appropriate to leave issues open for regional variation.[5] NCPA does not believe that the Final Rule precludes CAISO from proposing meaningful queue reforms addressing its principles and problem statements.

[1]CAISO, 2023 Interconnection Process Enhancements: Issue Paper and Straw Proposal at 3 (Mar. 6, 2023), http://www.caiso.com/InitiativeDocuments/Issue=Paper-and-Straw-Proposal-Interconnecton-Process-Enhancements-2023-Mar132023.pdf (IPE23 Issue Paper).

[2] CAISO, 2023 Interconnection Process Enhancements: Summary of June 20 and 21 Track Two Working Group Meeting Revised Principles and Problem Statements 1 and 2 at 3 (June 23, 2023), http://www.caiso.com/InitiativeDocuments/Revised-Principles-and-Problem-Statements-Interconnection-Process-Enhancements-2023-Track%202-Jun%2020-212023.pdf.

[3] Id.

[4] Improvements to Generator Interconnection Procedures and Agreements, Order No. 2023, 184 FERC ¶ 61,054 (2023) (Final Rule).

[5] Final Rule P 700.  

NCPA Comments In Response to Question 1:

Before addressing the concepts and proposals, NCPA notes that one of the most encouraging things it heard over the course of the IPE23 workshops was CAISO’s acknowledgement that it must do a better job at coordinating with non-CPUC-jurisdictional LSEs to assure that those LSEs’ resource plans are incorporated into the TPP. Such coordination will be necessary to assure that the IPE23 Enhancements satisfy Principles 2 and 5, and that they honor the goal (and legal requirement) of satisfying FERC-mandated open access and non-discrimination principles, which would not be the case if CAISO effectively excluded some LSEs from access to the TPP or IP for their resource needs.

To that end, NCPA observes that CAISO has yet to spell out how such coordination will be accomplished, although NCPA was pleased to hear that such an effort is soon to be underway. NCPA looks forward to CAISO’s forthcoming explanation of how such coordination will work. Until this piece of the puzzle is explained, NCPA’s support for the IPE23 proposal is conditional.

In addition, NCPA emphasizes the importance of CAISO maintaining the annual cadence of queue window openings. While NCPA understands why CAISO needed to pause Cluster 15, the lack of any available window in which to submit a project between now and possibly the end of 2024 is problematic for LSEs attempting to do resource planning (and to take advantage of other resources such as grants and tax incentives that may improve the viability of project development in an expedited time frame. The lack of predictability also encourages all projects, regardless of readiness, to submit in any window that opens, thus making the problem worse.

1)  Interconnection request intake

Within the framework set out in NCPA’s introduction, NCPA strongly preferred Concept 2 (procurement based on the needs of LSEs)[1] of the three concepts CAISO initially introduced. However, NCPA understands that Concept 2 as a standalone framework was not particularly well-received. During the workshop, several stakeholders appeared to coalesce around a variation of Concept 1 (established intake criteria)[2] which would give substantial or significant weight in the queue management process to projects contracted to LSEs or projects designated of interest by LSEs. The effectiveness of Concept 1 in meeting the needs of non-CPUC-jurisdictional LSEs depends on both the process for incorporating their resource plans into the TPP, and on sufficient weight being given in the queue management process to projects of LSE interest. Given these prerequisites, NCPA could support a modified version of Concept 1 as described. However, intake of projects under a modified version of Concept 1 should not be restricted based on location.

CAISO’s Principle 1 would prioritize interconnection requests in zones where transmission capacity exists or new transmission has been approved. The CAISO proposal at first appeared to contemplate only those zones designated by the CPUC.[3] Any proposal to look only at the CPUC-designated zones is too limiting. Non-CPUC-jurisdictional entities may have needs outside the zones designated by the CPUC and there may well be discrimination issues with closing off areas for any projects at all.

As noted above, many of the existing zones are in the southern part of the state, which would be problematic for NCPA as transmission constraints often prevent power generated in the south from properly serving NCPA loads in the north. Several stakeholders also opposed or raised concerns with the zonal restriction and proposed exceptions. These included the Large-Scale Solar Association,[4] Calpine,[5]  the Environmental Defense Fund[6], and New Leaf Energy[7] and some have proposed exceptions to the idea of prohibiting projects outside the zones, which CAISO should adopt. These types of projects should not be discouraged from entering the queue. Examples include:

• Repowering or replacement projects at existing interconnection points. There is no reason to discourage projects that do not change the amount of power injected at the delivery point, where there is room for additional delivery, or where costs to assure delivery are low. Repowers and replacements often involve replacing fossil fuel resources or supplementing with storage. There is no reason to limit such projects to prescribed zones. In fact, many of these types of projects can be developed on an expedited time frame to support the reliability of the system, as compared to greenfield project development that may be delayed due to required environmental mitigation.

• Projects located in local capacity zones. Projects located in local capacity zones (especially zones that are short of capacity) are potentially valuable additions to the grid in terms of reliability and mitigation of market power.

• Projects to serve local load. Projects in or near LSE loads may not require substantial upgrades to serve their purpose and may be used for islanding during Public Safety Power Shut-offs. Such projects may also serve other LRA and regulatory goals, including, but not limited to, development in support of disadvantaged communities, creation of opportunities for community-supported investment and reinforcement of internal system constraints to support other policy goals and objectives (i.e. electrification of transportation).

NCPA would have difficulty choosing just one of the stakeholder proposals as best suited to meet NCPA’s needs. NCPA liked the California Wind Energy Association proposal[8] for its lack of restrictions on where projects could be proposed, and for the inclusion of LSE expressions of interest to help determine commercial viability as projects move toward Phase 2.[9]

2)  Queue management

Under the modified version of Concept 1, LSE prioritization would be treated as a queue management issue. NCPA suggests that such projects be given great weight, because projects that are supported by LSEs with through rate base (via take-off contracts or commitments) will be more viable and financeable; therefore, such projects will have a much higher likelihood of success.

As an initial matter, NCPA supports the requirement for demonstrations of site control. The FERC Final Rule[10] dispenses with the deposit in lieu of site control except in limited circumstances (such as siting resources on BLM land or offshore wind). Site control must be 90% at the time of the cluster study and 100% at the time of the LGIA and must in both cases be exclusive.[11] NCPA would be supportive of requirements at least as strict as those in the Final Rule.

NCPA also supports strong commercial viability criteria.  NCPA recognizes that the FERC Final Rule did not adopt such criteria, but it clearly left the door open for Transmission Providers to propose independent entity variations specific to their BAAs.[12]

NCPA recognizes that criteria such as a PPA, letter of intent, RFP shortlist or inclusion in an LSE resource plan might not be generally appropriate for all proposed projects at the time of queue entry. However, these criteria should still be incorporated into the queue process and given significant weight in maintaining queue positions over time.

NCPA would give significant weight to the following:

• A signed PPA (this would not have to be the only way to demonstrate viability, but it should certainly count as one).

• Letter of Intent

• Documentation identifying selection of a resource in an LSE resource planning process

• LSE direct development and construction of a project to serve its own load pursuant to a regulatory requirement.

The CAISO’s current criteria for maintaining deliverability allocations in Tariff Section DD 8.9.2.1 embody many of these points and could serve as a starting point.

[1] IPE23 Issue Paper at 13 (therein Element 2).

[2] Id. at 12 (therein Element 1).

[3] Id.

[4] Large-Scale Solar Association, Comments at Response to Question 4 (June 14, 2023).

[5] Calpine, Comments at Response to Question 4 (June 14, 2023).

[6] Environmental Defense Fund Renewables, Comments at Response to Question 4 (June 14, 2023).

[7] 2023 Interconnection Process Enhancements Track 2 Working Group, New Leaf Energy Proposal (July 11, 2023), http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-2023-Track%202-Working-Group-Jul112023.pdf.

[8] 2023 Interconnection Process Enhancements Track 2 Working Group, California Wind Energy Association Proposal at overall slide 143 (July 11, 2023), http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-2023-Track%202-Working-Group-Jul112023.pdf.

[9] Id. at overall slide 146.

[10]Final Rule P 595.

[11] Id. P 585.

[12] Id. P 700.

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

1)  Interconnection request intake, 2)  Queue management

NCPA was most concerned by the proposal to auction entry into and positions within the queue from Shell.[1] Even if NCPA did not have other objections to the proposal, NCPA believes it would be virtually impossible to develop a complex auction concept in sufficient time to meet the CAISO’s compressed schedule. Moreover, there are other serious objections:

• The proposal makes no mention of the procurement needs of LSEs, thus failing to satisfy or even consider Principles 1, 2, 3 and 5.

• The proposal turns the interconnection process into one where the project proponents with the deepest pockets prevail, and may not properly account for the true intention of the project proponents to actually develop a project as opposed to obtaining a queue position to be resold at a profit.

• There are no constraints on market power. NCPA has concerns about entities hoarding queue positions to sell to the highest bidder when they become valuable enough.  The scarcity of transmission capacity in California ensures that queue positions will become more and more valuable. Where LRA planning efforts are seeking to identify the most viable project sites down to the parcel location, an auction could further amplify the risk of market power. Market power will not be sufficiently addressed through “competition” because the product being sought, interconnection capacity, is neither freely available nor liquid. Rather, it is highly dependent on various construction, siting and regulatory requirements that are not in themselves being driven by competitive forces.

• Successful project proponents will naturally include their bid costs in the project pricing, thus increasing costs for ratepayers who will ultimately fund the upgrades and pay for the increased cost of power in any case. Putting the winning bidder’s bid costs into the upgrade fund seems unlikely to solve this problem, when the winners can still charge high prices in the PPA.

[1] 2023 Interconnection Process Enhancements Track 2 Working Group, Shell Proposal (July 24, 2023), http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-Track2-Working-Group-Jul242023.pdf.

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

1)  Interconnection request intake, 2)  Queue management

 Please see NCPA’s comments herein.

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

Ormat Technologies (Ormat) appreciates the opportunity to provide responses to the CAISO 2023 Interconnection Process Enhancements Track 2 Working Group questions. Ormat’s comments are specific to experience gained over five decades developing and producing 1GW of geothermal power, recovered energy generation (REG), and battery storage in California and worldwide. Ormat agrees with the working group that CAISO queue management is the most significant issue facing renewable developers in California and is a challenge because of the numerous speculative projects not fully vetted. Ormat is proposing the following interconnection enhancements:

1. Identify and quantify unused interconnection capacity.  There are many grandfathered renewable projects with excess interconnection capacity that is unused and amplifying reliability concerns on the grid.  The CPUC recently established the Baseline List of Resources associated with the commission’s decision to address mid-term reliability (D.21-06-035).  The CAISO could require generators on this list to complete capacity testing and confirm needed interconnection capacity.  Ormat views Track 2 transparency on interconnection capacity as a critical need for prioritizing projects where location-constrained resources can be improved through viable firm baseload renewables.
2. Allow for interim deliverability.  This is an allowable practice in many other balancing areas across the United States and would allow firm renewable resources to reach commercial operation (COD) as soon as possible to immediately contribute to California reliability and climate goals. Further, given the development timeframe for geothermal development it is important to secure interconnection capacity early on - at least 5 years prior to COD - so transmission risk can be balanced with project exploration, permitting, and financing.  This could also help prioritize interconnection of resources in geographic proximity to off taker(s) and customer(s) and help Load Serving Entities (LSEs) achieve long-term targets as required by the CPUC.
3. Assign a weighted score to allow for projects with an executed Power Purchase Agreement (PPA) to receive interconnection priority.
4. Assign a weighted score to allow for projects that are eligible for Mid-Term Reliability (MTR) to receive interconnection priority.

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

Most significant here is the FERC 2023 changes have potential to reform or overshadow CAISO initiatives, particularly pertaining to site control and queue management. That said Ormat is concerned on a CAISO focus on commercial readiness because it favors a renewable portfolio of largely solar or battery storage. These are developed faster and at less cost than geothermal but lack reliability. Along these lines any focus on auction reliant proposals will also bias against firm baseload renewables due to the long durations needed for project development.

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

Ormat commends the state’s commitment to achieving a 100% renewable power and for recognizing the importance of baseload reliability and 24/7 generation.  At this time, we believe that CPUC’s decision requiring MTR eligible resources is a bit out of sync with the CAISO’s interconnection initiatives.  Both agencies must push forward toward the same goals in order to achieve 100% reliable renewable power.  With this, Ormat asks to prioritize interconnection capacity for contracted MTR development projects whenever possible.

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

PG&E appreciates the opportunity to submit these comments on the Track 2 working group discussions, stakeholder proposals, and CAISO’s presentation from the August 1, 2023, working group meeting. Preceding the August 1^st working group meeting, the Federal Energy Regulatory Commission issued its final rule on generator interconnection improvements (“Order 2023”) on July 28, 2023. Many of the interconnection request intake reforms (e.g., site control requirements, deposits, and study timeline) that have been the subject of discussion in Track 2 of IPE have now been superseded by Order 2023, which includes prescriptive requirements on what is required to enter the cluster queue and the processing of the study process. Nonetheless, there is no assurance  that Order 2023 will lead to more reasonable cluster sizes rather than the “superclusters” seen in Cluster 14 and positioning of Cluster 15; thus, PG&E believes it is necessary that CAISO take additional steps to reform the GIDAP that will be in addition to the requirements in Order 2023.

PG&E comments herein focus on responding to CAISO’s presentation from the August 1^st working group meeting, followed by additional proposals that PG&E believes may help address the problem statements.

PG&E Response to CAISO’s August 1^st Presentation on Interconnection Request Intake (p. 21)

Data Accessibility:

Consistent with resource developer proposals and Order 2023, PG&E generally supports more data being made accessible to help interconnection customers make more definitive decisions and limit speculative projects from entering the cluster study process anymore. If the CAISO proceeds with providing more data before implementation of the heat map required by Order 2023, the CAISO should provide the PTOs adequate time to gather the data required. PG&E recommends the CAISO work with the PTOs on an agreeable schedule for providing the data in advance of starting the Cluster 15 scoping meetings. In addition, the data that is produced should also encompass data that is necessary for the CPUC’s busbar mapping efforts as part of the IRP resource portfolio development.

Also, if the data accessibility exercise is not a part of the cluster study in which the study deposits would be used by the PTOs to charge their time, then the CAISO needs to evaluate some sort of funding to the PTOs to perform this exercise.

Finally, the CAISO should ensure that any standalone data publishing requirements established for Cluster 15 and possibly beyond do not become duplicative of the future heat map required by Order 2023.  Rather, any data requirements beyond those required for the heat map in Order 2023 should be incorporated into CAISO’s implementation of the heat map and any separate standalone publishing requirements should terminate upon the heap map going live.

Interconnection Request Requirements:

PG&E supports enhanced commercial viability criteria requirements for interconnection customers to enter the Cluster Study Process.  In addition to the new site control requirements established in Order 2023, PG&E recommends the CAISO implement an interconnection financial security requirement to enter the Cluster Study Process, but that is greater than the study deposits and/or initial commercial readiness deposit included in Order 2023.  CAISO could require a $4,000/MW as an initial  interconnection financial security posting from interconnection customers, which would be equivalent to what FERC approved for MISO and SPP areas.

Selection of Option A and Option B Projects:

PG&E supports prioritizing projects that meet certain viability requirements and including them in Option A and other projects that don’t meet the viability requirements in Option B.  After meeting Order 2023 site control requirements, PG&E suggests projects siting within one of the zones identified by CAISO have high priority as they should be able to connect without any additional major upgrades and reduce the rate burden on PTO customers, pending that projects do not trigger major upgrades in adjacent zones.  PG&E caveats its support for prioritizing projects that are in the zones identified as having existing capacity or planned capacity to the extent the interconnection request is not for a resource that is geographically limited due to the nature of the resource (e.g., pumped hydro, geothermal, offshore wind).  The CAISO should also take into consideration CPUC procurement directives in determining prioritization of certain types of resources in the Cluster Study Process.  For example, the CPUC’s Mid-Term Relaibility (MTR) decision ordered load-serving entities (LSEs) to procure 1,000 MW of “generation capacity that has no on-site emissions or is eligible under the requirements of the renewables portfolio standard program, and has at least an 80 percent capacity factor.”  There are few current generation technologies except for likely biomass and geothermal that could meet those CPUC requirements.  Therefore, the CAISO should ensure interconnection requests for technologies with operating characteristics specifically required by the CPUC receive high priority if they meet the site control requirements of Order 2023, but request to site in a location that is not identified as one the zones by the CAISO with existing or planned capacity.

In the event there are still too many projects that meet the site control requirements in Order 2023 in the zones CAISO is directing interconnection requests toward, PG&E suggests that projects that fall in the categories below have highest order of preference:

1. Expansion projects
2. Projects proposing to connect to an existing gen-tie.
3. Projects that do not trigger substation or switching station expansions beyond the fence.
4. Projects that trigger switching station that meet PTO requirements of siting the new station near the midpoint of the transmission line.
5. Projects that are brownfield sites over greenfield sites, since the permitting process will likely be more successful and more expedient with less environmental challenges, leading to the project’s ability to materialize.

PG&E does not recommend the CAISO use LSE interest as viability criteria to prioritize projects for the Cluster Study Process.  PG&E previously voiced concerns during the working group meetings on relying on an LSE’s interest in a project for scoring given the fact that LSE interest in non-binding and there is inadequate information at the initial stage for an LSE to understand the potential network upgrade costs and timeline that determine the ultimate cost to utility customers and ability of a resource to meet resource adequacy online date requirements.

Finally, given the non-financial commercial readiness requirements in Order 2023, PG&E does not believe an auction mechanism will be necessary to ensure only a reasonable amount of interconnection requests proceed to the Cluster Study Process.  However, if the CAISO decides to proceed with establishing an auction mechanism, then PG&E recommends that any proceeds from auctions be directed to reducing the transmission access charge (TAC).  There may also be non-monetary auction mechanisms that CAISO should explore to limit potential market power.

Single-Phase Study Process:

PG&E generally supports transitioning to a single-phase study process consistent with the requirements of Order 2023.  With th proposal to provide additional interconnection data upfront and the new site control requirements in Order 2023 hopefully resulting in speculative projects not entering the queue, the study results from a single-phase study should be provide meaningful results and allow resource developers to obtain a PPA.  However, the single-phase study process will only work if the number of interconnection requests in PG&E’s service area is a reasonable amount and spread throughout the preferred CAISO zones.  A reasonable amount would be similar to interconnection request numbers seen proceeding to Phase 2 in Cluster 13 and prior, which is no more than 20-25 projects for PG&E’s service area.  However, with the current backlog in the queue, the cumulative impact on the cluster study process with an annual addition of 20-25 projects will render a single-phase study ineffective.  PG&E urges CAISO to develop a methodology to clear the existing queue backlog to ensure meaningful studies for Cluster 15 and beyond.  The two – i.e., limiting number of interconnection requests and clearing the current queue backlog – need to work in tandem to produce meaningful results in a single-phase study process.

PG&E recommends the single-phase study process be treated as a Phase 2 study and that CAISO allow the PTO’s adequate time to complete all the necessary studies, including site visits to substations. The single-phase study process should only be applied if the number of projects is a reasonable amount and spread throughout the zones.

Modeled as a Phase 2 study, the single-phase study should include the following components:

• Interconnection Facility (IF)
• IRNU 
• Reliability Network Upgrades 
• Short Circuit Duty Upgrades
• Reliability Upgrades for thermal and voltage overloads
• Bus Flow
• Transient Stability and Post-Transient Voltage Study 
• Sub-Synchronous Control Interaction (SSCI)
• Earliest Achievable In-Service Date based in IRNU, RNU, CANU and PNU milestones
• Updated cost cap (MCR, MCR) and cross cluster allocation methodology to be considered

PG&E Response to CAISO’s August 1^st Presentation on Managing the Queue (pp. 23-29)

PG&E believes that in parallel with implementation of Order 2023 requirements for the interconnection request intake process, it is vital to also to clean up the existing queue of projects that are speculative and are not moving forward to GIA execution and construction.  Otherwise, it will not be possible to meet the Order 2023 study timeline and produce meaningful results in the single-phase study process.

Suspension: PG&E supports removal of suspension rights.  If interconnection customers have intentions of moving forward to a LGIA and construction, and have the necessary site control requirements in place, there should be no reason to suspend a project.  Network upgrades are studied at a point in time and the cost caps are set at that time. The ability to suspend projects creates more volatility to PTOs due to increase in costs, scope changes, and system changes. Removing suspension rights will help reduce the cost impacts to our ratepayers.

Viability Criteria and Time in Queue:  PG&E supports stricter rules and guidelines to get projects to move towards commercial operation in a more efficient and timely manner.  This criterion should also include more stringent and upfront posting deadlines at the time of LGIA execution so that the PTOs can proceed with ordering long-lead materials sooner due to the issues the industry is facing with supply chain issues.

Considering an Added Posting: PG&E supports adding another posting requirement to require the interconnection customer to decide if their project is or is not proceeding to an LGIA. However, if an interconnection customer proceeds to an LGIA execution within the two years then the 75% posting is due at that time for the PTO to move forward with long-lead material purchases.

Shared Upgrades: PG&E supports the concept that all projects need to post securities for shared upgrades when the first project executes their LGIA.

MMA/LOS Interaction: PG&E supports the thought process the CAISO has proposed regarding the MMA/LOS Interaction. PG&E supports allowing interconnection customers to submit nine (9) months prior to sync but proposes that LOS studies do not commence until MMA results are published if the modification involves any change in technical parameters of the project.

PG&E also recommends a strict limit on the number of modification requests to change milestone dates that are not caused due to PTO.

Project Accountability:  PG&E recommends that CAISO also establish a limit of number of defaults per developer for not reporting status of the projects as required before they are withdrawn from the queue.  In addition, CAISO should impose penalties for every default similar to its proposal of penalties for MMAs due to interconnection customer delays if not submitted within 10 business days.

One Time Withdrawal Opportunity: PG&E supports the one-time withdrawal opportunity from the queue, contingent on the waiving of Appendix DD Section 14.2.2 to not shift the cost burden onto PTOs of interconnection upgrade costs that are being caused by the applications of the interconnection customers.  Without the interconnection requests, this work would not need to occur and, therefore, the PTOs and its customers should not have to bear the cost of these upgrades when interconnection customers suspend, withdraw, or delay their projects.

PG&E only supports this proposal if PTOs are able to:

1. Recover the withdrawing customer’s share of actual costs incurred from either deposit previously received or, if costs exceed deposit amounts, then collect the incremental amount for the interconnection customer; and
2. Recover the costs needed to complete the withdrawal of the interconnection customer, including any engineering activities needed to remove the project from the PTO (up to the end of the applicable reconciliation period per the interconnection customer GIA at the time of withdrawal).

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

PG&E has no comments at this time but reserves the right to provide further comments on any concerns in the future.

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

Additional Proposals from PG&E

Customer Engagement Window/Scoping Meeting:

PG&E recommends that there be required scoping meetings akin to the 60-day engagement window in Order 2023 that would provide interconnection customers with information to determine whether they want to proceed to the Cluster Study Process and submit an interconnection financial security posting as proposed above.  PTOs would provide the following information at the scoping meetings:

• POI Availability;
• Estimates for IRNU scope, cost, duration based on past studies;
• RNU Capacity constraints and availability from published TPP, Cluster, Annual Reassessment, GRNU, CANU, PNU;
• Expected timelines for planned and active IRNU projects and capacity projects near the project vicinity; and
• Expected timelines for Area and Local Deliverability Network Upgrades required for FCDS.

Post Single-Phase Cluster Study:

Following the single-phase Cluster Study, PG&E recommends CAISO require an interconnection financial security to bring an interconnection customers total posting to 50% of the interconnection customer’s network upgrade cost assignment identified in the cluster study readiness to allow them to proceed to the Cluster Restudy. 

PG&E also suggests that CAISO require Appendix B with an updated full interconnection request package before Cluster Restudy starts.

Cluster Restudy Phase:

Operational Year Reliability Study in Lieu of Annual Reassessment: PG&E suggests CAISO implement reforms that would have PTOs perform an Annual Study for the year 2, year 5 and year 10 out time horizon. All generators with an in-service date in this time horizon would be modelled, and this would replace today’s Annual Reassessment studies.

Post Facility Study and Managing the Queue:

Addition of Third Interconnection Financial Security Posting: PG&E suggests the CAISO implement a third IFS posting requirement for interconnection customers to proceed to GIA, which would be due 1 to 1.5 years from the completion of Interconnection Facility Study or the project would be deemed withdrawn from the queue.

Post Study Activities:  PG&E believes there is an opportunity for CAISO to establish set timelines for Affected System Notification, Identification and Mitigation Implementation plan after the single-phase study or cluster restudy is complete and incorporated as part of the LGIA. 

Material Modification and Limited Operations Studies: PG&E recommends the CAISO adopt measures to limit the number of Material Modification Requests submitted by interconnection customers for change in project information or extend ISD/COD.  One option is to establish a separate MMA type for COD extensions, and change to fee-based instead of deposits and increase costs for changes included in the MMA.  For example, CAISO could establish a $5,000 fee for milestone extensions and $15,000 for technology and other changes.

As stated above, PG&E also supports CAISO’s proposal that Limited Operational Studies are allowed 9 months prior to projects expected ISD.  In addition, an Operational Study should be accompanied by MMA to reflect final generating facility configuration required by Attachment A – Generating Facility Data to Appendix 1.

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

REV Renewables (REV) appreciates all of the thoughtful proposals from stakeholders and CAISO in this initiative to date. Collectively we are trying to improve the interconnection process to bring resources online in a timely and efficient manner to help achieve California’s ambitious clean energy and reliability goals. As such, it is important to focus on solutions concepts that would unlock roadblocks and/or create efficiencies. REV acknowledges that FERC Order 2023 may require changes in some aspects of the CAISO interconnection process, but REV recommends that CAISO still consider proposals from this initiative since many are outside the scope of Order 2023 and therefore also should not be in conflict with Order 2023. Below are proposals that REV think would meaningfully address the problem statements and solve real problems in the process today. These proposals, at a minimum, should be moved forward in this initiative.

1) Interconnection request intake

1. Resolve timing challenges in Transmission Plan Deliverability (TPD) Allocation and retention process (Clearway and LSA)
   • REV agrees there is a major concern with the disconnect in requirements for receiving or retaining TPD allocation and the PTO upgrade timelines. As parties note, some upgrades are not expected to be completed until after 2030, yet no LSE is procuring capacity out that far, so meeting the requirement to even be on a shortlist is not feasible. While CAISO made changes to this process recently, this new upgrade timeline challenge became apparent in Cluster 14 Phase 1 results, and is likely to persist with Phase 2 results and Cluster 15. Therefore, Cluster 14 projects in this upcoming TPD allocation cycle will be in a bind on how to maintain deliverability while they wait for necessary upgrades.
     • In addition to proposals from Clearway and LSA, REV proposes that CAISO could work backwards from the date of the longest lead time of expected upgrade to be complete, and work back a to be defined number of years to set the requirement to show at least a shortlist and allow a type of “parking” that holds deliverability until then. For example, if in the next TPD cycle a project receives deliverability, but the longest upgrade timeline is expected to be complete in 2030, if CAISO chooses 3 years before COD, then that project could keep its deliverability allocation without having to show at least a shortlist until 2027. CAISO could set requirements to show progress on the project during that parking time (e.g. permits obtained).
   • The TPD allocation is generally done after the Phase 2 study process. However, it is unlikely that Cluster 15 Phase 2 will be complete by the usual TPD allocation process time in 2025. Therefore, REV requests clarification on when Cluster 15 will be studied, and if there is a gap year that CAISO will still run the TPD allocation process (e.g. in 2025) for Cluster 14 projects again.
2. Simplify, automate and standardize the Phase I interconnection study process (LSA, NextEra, SDG&E, SCE, PG&E) 
   • REV agrees there are opportunities to streamline the Phase I study process, including using AI tools, simplified and standardized models, and more to reduce the time required for validation and allow for quicker Phase I process.
3. Provide more opportunities for Interconnection Customers (IC) to self-fund network upgrades, including reforming “Option B” (REV, LSA, Vistra)
   • It is clear that more opportunities exist for allowing ICs to fund a portion or all of the required network upgrades as a way to get project to commercial operation. However, the current process does not easily allow this, which is why no customer has pursued this option to date. REV agrees with the reform options listed by parties, and in particular thinks it is critical to clarify that, if a IC pursues a self-fund option, that FCDS is guaranteed or the project is given a top priority group in TPD allocation as a way to ensure it is worth the financial investment to pursue this option.
   • REV reiterates that its proposal that, if IC does not receive Option A TPD allocation in the first year, then CAISO can allow the IC a one-time opportunity to go back and choose to self-fund (Option B) certain low cost non-nested ADNUs in specific areas[1]. CAISO could also create a process to connect customers to collectively fund these upgrades. These customers would then participate in the next TPD cycle with higher priority to attain deliverability. Alternatively, CAISO could also explore opportunities to recategorize some of these ADNUs as LDNUs which will achieve the same objective as described above.
4. Integrate and reform IRP, TPP, and GIDAP to approve and construct new transmission earlier (Middle River Power)
   • REV agrees that timelines should be aligned among the various planning processes so that the latest data is being used. Additionally, this data should be available to ICs before the new cluster opens. REV encourages the agencies to continue to improve resource need and transmission planning models, and notes there is still a lag in models and data used. For example, in CPUC presentation from 7/11, CPUC prioritizes “higher confidence” commercial interest projects as anything essentially at least through Phase 2 study process. This means that the current Cluster 14 projects (which are awaiting Phase 2 study results) will not be included in the IRP portfolios to study in the next TPP. Yet those Cluster 14 projects will have to go through the TPD allocation process in early 2024 to fight for limited capacity. Tightening this data lag could help identify new transmission upgrade needs earlier in the process.
5. Establish goals for PTOs for completing interconnections and increasing resources available for completing studies and upgrades. (Gridstor, REV, CAISO)
   • REV agrees there should be shared responsibility throughout the interconnection process, where if developers are held to stricter requirements and timelines, there should be similar accountability on the CAISO and PTO side on completing studies and required network upgrades. This can provide greater certainty for all parties and bring projects online in a timely manner. If studies or network upgrades cannot be completed in the necessary timeframe, qualified third-parties should be allowed to complete the studies or construct the facilities.  
   • As REV proposed, CAISO should hold PTOs to LGIA schedules to ensure upgrades start when the developer issues NTP, including the upgrades that get triggered by a group of projects.
   • REV supports CAISO’s proposal requiring all projects to post financial security by the earliest date of one of the projects. At this time, it is not exactly clear how this requirement will be applicable to projects without LGIAs, but it is a step in the right direction for enabling the timely completion of shared network upgrades required for projects to come online. We suggest CAISO explore this further and include it as an item for discussion in the next straw proposal.
   • REV agrees one option could be to reduce withdrawal penalties on IC if PTOs substantially delay study and construction milestones. Additionally, CAISO can file tariffs for PTOs incentives associated with meeting/not meeting completion goals.

2) Queue management

1. Allow one-time penalty free ability to exit queue (CAISO, LSA, NextEra)
   • REV agrees this one-time option could be an effective way to clean out the queue. CAISO should consider options to limit the financial impact on other projects, such as only allowing this for projects that do not have an LGIA.
2. Simplify the MMA process (Clearway, Vistra, Gridwell)
   • REV agrees there is a need to increase the efficiency and accuracy of MMA process, and stakeholders have discussed several viable options that should be explored, such as simplifying modeling requirements for certain MMA requests. These types of changes would be more effective than arbitrarily limiting the number of MMA requests or timing of MMA requests, which could have unnecessary negative consequences to viable projects.
   • REV suggests that CAISO maintain MMA and LOS as independent processes, these often happen during critical phases of project development and timely resolution of the request is important.
   • REV does not support Gridwell’s proposal to allow only one COD change post-LGIA, and does not support SDG&E’s proposal to limit the number of MMA requests to no more than once every 12 months. There could be several valid reasons for more than one COD change (and more than one per year) and it is important to have accurate timing relayed to all parties.
3. Limited Operation Study (LOS) improvements and interim deliverability (Clearway, Avantus, LSA)
   • REV agrees that there are opportunities to leverage (and potentially reform) the LOS process and interim deliverability process to provide projects with information that would enable them to come online earlier than the longest lead upgrade would otherwise allow. REV suggests CAISO evaluate whether these studies could provide information to projects earlier in order to achieve financing milestones necessary to start construction and come online, even if it is limited until all upgrades are complete.
4. Requirement to maintain valid milestones within reasonable timeframe (Vistra)
   • REV supports this concept, though suggests that enforcement of existing LGIA and CAISO timelines and milestones may be sufficient without creating new requirements.

[1] C14Phase 1, SCE Northern area ADNU - Antelope Vincent and Lugo-Vincent ground clearance and terminal equipment work along with SCE Metro-Barry Del Amo 230 kV upgrades could be considered for treatment as LDNUs. These are relatively low costs upgrades with construction timelines that meet 2026-2028 CPUC MTR requirements. 

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

1) Interconnection request intake

1. Limits on interconnection requests or megawatts per transmission zones (CAISO, Intersect Power)
   • REV does not agree that CAISO limits on IRs/MW in zones, and supports CalWEA in that no limit should be placed on the number, size or location of the submitted interconnection applications. Setting a limit implies that a certain number of projects will be successful. Traditionally, a small portion of projects that enter the queue actually get built, it will be difficult if not impossible to know where is the right place to draw the line. California needs to build at unprecedented levels, so we should not rely on historical levels of requests or limits. If CAISO does set limits, then REV agrees with LSA that there should be ways to appeal or provide exceptions, as there can be several reasons why a developer chooses a location that may not fit neatly in a zonal bucket.

2) Queue management

1. Do not allow EO projects to try again for FCDS (NextEra)
   • REV does not agree with the proposal to allow Cluster 13 projects that converted to EO to try for FCDS again as it would be unfair to projects that have already dropped out due to the current rules.
2. Do not allow cyclic, conditional penalty free withdrawal (Avantus)
   • While REV supports a one-time opportunity to clear out the existing queue, REV does not support this as a regular/cyclical opportunity. This would make penalties currently listed essentially meaningless if the IC could just wait for the next withdrawal holiday.

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

1) Interconnection request intake

1. Increased data availability prior to cluster opening (AES, Vistra, Avantus, Middle River Power)
   • REV supports increasing basic data transparency to improve IR intake. CAISO already publishes much of this data transmission availability data. CAISO could have an annual Resource Interconnection Fair as CAISO has done in the past where CAISO could share basic info on grid capabilities. Additionally, the FERC Order 2023 sets the requirement for a type of heat map to help ICs, which could help customers have more data. REV notes that interconnection costs are a critical component of project success, and that information can only be obtained by going through the interconnection process. If CAISO has a way to provide that information in a generic form (e.g. by zone), REV is open to that idea.
2. Establishing scoring/readiness criteria – set minimum requirements instead (CAISO, AES, Intersect Power and NextEra)
   • REV suggests that there should be set requirements to enter the queue that provide assurance at the time of application on whether or not an interconnection request will be studied. Some of the proposed scoring criteria could be used to revise the current minimum requirements. However, if it is scoring system where the threshold to enter may vary by year (e.g. Cluster 15 all projects with score higher than 80 will be studied, and Cluster 16 all projects with score higher than 90 will be studied), then it provides a difficult to understand moving target that is unfair to ICs.
   • Additionally, setting a threshold on a scoring system implies that a certain number of projects will be successful. Traditionally, a small portion of projects that enter the queue actually get built, it will be difficult if not impossible to know where is the right place to draw the line.  
   • REV opposes certain criteria that are infeasible at the time of IR application, such as PPA/short list or engineering design, and can be unjust and unreasonable to impose on developers that waste will waste unnecessary resources.
3. Increased interconnection fees and deposits (NextEra)
   • FERC Order 2023 establishes interconnection fees and deposits for each phase. REV suggests that CAISO utilize that as a guide if it makes any changes to these elements.

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

1) Interconnection request intake,  

Given the need for an interconnection process reform to address the unsustainable increase in the number of interconnection projects lingering in the queue, SDG&E generally supports proposals that enable commercially viable projects toward developing and ultimately achieving commercial operation while implementing an interconnection process that prevents or minimizes speculative projects from entering the interconnection queue or unviable projects from lingering in the queue. 

Positive concepts discussed include:  

• Interconnection Request intake process 

• Simplify the IR data validation process 

• SDG&E still believes there is opportunity to pursue this given the recent FERC 2023 ruling and hopes CAISO will still consider the merits of studies using generic models 

• Stringent proof of Site Exclusivity (no Deposit in lieu of Site Exclusivity). While the FERC ruling does require site exclusivity, the details need to be carefully implemented. For example, SDG&E encourages CAISO to consider changes in site exclusivity as an MMA so that reasonable controls can be introduced around allowing changes in demonstration of site exclusivity. 

• Operational/Reassessment Study 

• Perform the study using the full/complete IR data package including PSLF .epc and .dyd files reflecting the parameters of the actual generating facility 

• Require 3rd IFS posting to enter the GIA phase and consider adding a 4th IFS. 

• GIA Phase 

• GIA to be executed within 2 years or the project will be deemed Withdrawn 

• Limit the number of MMA requests 

SDG&E strongly supports New Leaf Energy’s proposal to prioritize local RA which enhances reliability where load growth occurs. It is important to note that zones which are deficient in local RA must be identified to appropriately prioritize local RA, if not then it becomes system RA. 

2) Queue management 

? 

SDG&E would like to reiterate its own proposal related to the “managing the queue” situation.  In the workshop, SDGE proposed the following: 

• Higher commercial viability criteria requirement 

• Demonstration of any activities related to obtaining necessary permits from governmental agencies 

• 3rd IFS Postings required (new 4th IFS posting to be introduced?) to enter GIA negotiation 

• GIA to be executed within 2 years from the final interconnection study or the project will be Withdrawn 

• Power Procurement Shortlist/Interest 

• Limit the number of MMA requests to no more than once every 12 months 

• Fee based (no longer a Deposit) 

• Increase the amount 

• One Time opportunity to Withdraw with no or minimal penalty 

• Increase the Withdrawal penalty amount for QC15 and later projects 

• Reduce the IR “Park” timelines 

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

SDG&E disagrees with any proposals to reduce the changes that constitutes an MMA. Despite the historically high MMA approval rates, all MMA requests must be formally documented and properly evaluated to ensure safety and reliability of the system. It is important that PTOs maintain the most recent and updated generating facility related equipment that are being installed.  Therefore, SDGE recommends that all MMA requests continue to go through the formal evaluation process.   

While SDG&E supports the one-time withdrawal opportunity, we do not believe that “regularly” allowing non-viable projects to voluntarily withdraw penalty-free will be effective in “managing the queue”. In fact, this periodic allowance would likely encourage non-viable projects to remain in the queue in anticipation of more withdrawal opportunities down the road. 

Finally, SDG&E supports CAISO’s decision to exclude any form of subscriber network upgrades from the scope of this IPE proceeding. 

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

The recent FERC 2023 ruling puts mandates around many of the items that are being discussed in the IPE. However, SDG&E notes that in many cases simply implementing the FERC ruling will result in maintaining the status quo in the CAISO interconnection process. Therefore, it is highly likely that the IPE will have to go beyond what is mandated by the ruling.  

As the FERC ruling relates to queue management, there may be opportunities to update these new requirements throughout the queue. It should be explored how new viability criteria (site exclusivity, deposit structure, etc.) from FERC 2023 ruling would apply to projects that have been lingering in the queue. It may be prudent to consider some timeline (such as one or two years) to allow all projects in the queue to meet the new viability criteria in the ruling. 

SDG&E refers to our original proposal as submitted and presented in the 7/11/23 workshop as a solid proposal that addresses most of the issues brought forth in the IPE. Further, the entirety of the proposal (in particular, single cluster study phase, increased study deposits, expanded scoping phase that is now a heat map) is compatible with the requirements of the FERC ruling. Elements of that proposal that CAISO can use to go beyond the FERC ruling include the 3rd posting before the GIA, and operational study. Note that SDG&E still maintains the usefulness of the operational study, as it provides a year-by-year ISD analysis that can be used to inform formulation of GIA milestones more accurately. 

SDG&E agrees with CAISO’s previous assertions that transformational changes are needed in this IPE to address the large interconnection backlogs that have developed in the CAISO interconnection queue. SDG&E supports interconnection reforms where commercially viable projects are effectively allowed to develop through COD while excluding non-viable projects early in the process.  SDGE would like to see a major overhaul to the current interconnection process and not some minor tweaking here and there that may not fully address the existing interconnection backlogs.   

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

The Six Cities thank the CAISO for the robust and comprehensive working group process.  The working group discussions successfully elicited a range of ideas for addressing the principles and problem statements in this initiative.

While the Six Cities will continue to monitor this initiative and expect to comment fully on proposals included in the Straw Proposal to be issued next month, at this time the Six Cities provide the following observations and preliminary positions on a number of the concepts and proposals that have been offered thus far:

• Build on existing processes:  The Six Cities generally concur that proposals to streamline interconnection request intake and more rigorously manage the interconnection queue should build on existing processes and frameworks.  Ideas that leverage and improve the current interconnection rules, which worked with relative success for a number of years, can likely be implemented more quickly and with less disruption. 
• Prioritize planning and procurement decisions by local regulatory authorities:  It is of critical importance that interconnection requests associated with local regulatory authorities’ policies and procurement are prioritized in the interconnection study and deliverability allocation processes.  For this reason, the Six Cities support strengthening both the criteria required to enter and remain in the queue, the study priorities, and the deliverability allocation procedures through enhanced commercial viability criteria.  In developing this criteria, projects that are authorized by a load serving entity’s local regulatory authority should receive a preference or be highly ranked or scored relative to projects that are not linked to local regulatory authority policy and procurement.  The Six Cities agree that documentation of any authorized procurement commitments should be required and, while such documentation should not necessarily require a power purchase agreement, other forms of documentation that could be considered may include a letter of intent, inclusion of a project in a resource plan, or other evidence that a load serving entity intends to rely on a project for its planning purposes. 
• Leverage the concept of development zones, with exceptions:  The CAISO and various stakeholders have suggested that study processes should be revised to focus on zones where transmission capacity is either available or planned, and that capacity in these zones may need to be rationed among interconnection requests.  The Six Cities do not oppose consideration of these ideas, but recognition and use of zones must not foreclose a local regulatory authority approved project from being studied for interconnection and deliverability.  For example, if a municipal utility elects to develop a resource that is located outside of a CAISO-specified zone and is committed to the development of such resource, either because the utility is developing the resource, is participating in its development through a joint action agency or similar arrangement, or has entered into a contractual commitment such as a letter of intent or power purchase agreement with a private developer, the CAISO should proceed with the interconnection process for said resource, which is demonstrably viable and does not pose the same development risks as other projects. 
• Align with deliverability allocation processes:  The CAISO’s interconnection procedures are only part of the development equation for resources; practically speaking, resources that are not allocated transmission planning deliverability are unlikely to develop, and uncertainties regarding deliverability allocations create procurement risk for load-serving entities.  For example, the Six Cities may put considerable time and effort into procurement processes for new resources, including, potentially, obtaining local regulatory authority approval for new projects, only to learn well after staff time and resources have been expended that the project is not allocated all of the deliverability necessary to provide resource adequacy capacity.  While the deliverability policies are pending in a separate initiative, they are intrinsically linked to the interconnection process, and the Six Cities encourage the CAISO and stakeholders to consider how the deliverability allocation rules can be strengthened so that there is greater certainty earlier in the interconnection process regarding deliverability allocation.  Projects that load serving entities are developing or have committed to procure in their resource plans should be highly prioritized. 
• Other measures merit consideration:  During the working groups, stakeholders and the CAISO suggested a variety of additional measures to improve the interconnection process.  The Six Cities preliminarily support (1) consideration of ways to streamline and simplify the material modification process; (2) expanding rules for interim deliverability; (3) developing more rigorous rules for enforcement of milestones and other project development commitments; (4) enhancing commercial viability criteria and site exclusivity requirements for application at relevant stages of the interconnection process; (5) addressing certain informational needs that parties have identified; and (6) revising fees and security requirements so that they pose a higher barrier to speculative interconnection requests. 

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

At this time, the Six Cities do not believe a persuasive case has been made for the proposal of an auction process to allocate either queue position or rights to be included in interconnection studies.  While the Six Cities support consideration of ideas that will ensure resources are not dedicated to studying a greater number of projects than are reasonably expected to come online, consistent with the ideas stated immediately above, an auction process entails added complexity and cost.

The CAISO and stakeholders should proceed cautiously in evaluating proposals that might shift cost or risk to transmission customers.  For example, some of the working group discussions involved consideration of withdrawal opportunities for projects that either elect not to proceed or are not viable, and, in some instances, this could result in responsibility for financing network upgrades falling to Participating Transmission Owners.  Although the Six Cities are not categorically opposed to all such measures, these approaches merit careful consideration to ensure that they actually will accomplish a desired policy goal and will not result in misuse. 

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

In general, the Six Cities support the principles that have been articulated to date, and specifically support retention of principles 2 and 5, including the references to procurement planning and activities by local regulatory authorities. 

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

Sonoma Clean Power (SCP) is very appreciative of the thought and effort contributed by stakeholders and the CAISO in the Interconnection Process Enhancements 2023 Track 2 process. As a load serving entity with strong ambitions for driving resource development that contributes to progress on climate and grid reliability, SCP sees reforming the interconnection process as a necessary part of relieving a critical bottleneck to that progress. SCP recognizes that FERC Order 2023 may limit the ability of the CAISO to implement many of the proposed reforms, but asks CAISO to consider the following proposal elements when crafting a straw proposal and developing solutions for the upcoming generation deliverability methodology stakeholder initiative:

• AES Point System: If the CAISO implements a zone-based or queue-wide constraint for accepting interconnection applications, the AES point system is a reasonable solution for prioritization, and is consistent with the first step in the CAISO’s Concept 1. It reflects the type of criteria LSEs incorporate into their processes of selecting contractable resources. Although AES does not specify an exact value for the “Resource Diversity” bonus, SCP believes high-capacity factor resources with long project development timelines should be heavily weighted in the evaluation given their importance to decarbonization. This will enable these long lead-time projects to compete with shorter cycle solar and storage resources. SCP also believes commercial readiness should be informed from direct LSE input rather than PPA status—which is discussed further in the response to prompt 3.
   
• CalWEA LSE Input: A key concern with any type of prioritization or gatekeeping in the interconnection process is ensuring that the projects that do ultimately receive deliverability are contractable. With California’s current market focus on deliverability, it is unreasonable to expect most projects in the interconnection queue to be under contract when they enter the queue. The best way to gauge contractability is to directly ask the LSEs after Phase I results are available to calibrate project cost expectations, as suggested by CalWEA. SCP strongly supports CalWEA’s recommendation and discusses the process it envisions for direct LSE input in prompt 3.
   
• Middle River Power MISO-like Heatmap: A serious issue with the current queue system is that there is an inadequate amount of accessible data on grid capacity to inform developers—leading them to use the cluster process as an information-gathering exercise. Middle River Power’s suggestion to introduce an interface like MISO’s POI Analysis Tool would be incredibly impactful. As suggested in the August 1^st workshop, the CAISO should endeavor to create a resource that also provides transparent information on the impact of planned upgrades to interconnection capacity.
   
• Clearway Contractable Interim Deliverability: Several stakeholders flagged the opportunity to improve the interim deliverability process to mitigate the impact of large and lengthy network upgrades on project CODs. SCP believes this opportunity should be seriously considered. Clearway’s proposal to enable suppliers to make contractable assurances of deliverability after exiting the cluster process is an excellent strategy for accelerating deployment of much-needed generation and capacity resources while also maximizing the utilization of existing transmission capacity. As an off-taker, SCP would be unwilling to stay in contract with most resources that have uncertainty on deliverability until a year before COD, which may force the project to exit the queue and reenter the interconnection process after upgrades are complete—adding additional burden on the system. Upfront visibility on interim deliverability for these projects would allow them to remain viable and accelerate their contribution to California’s clean energy and reliability needs.
   
• NextEra Cluster 13 Energy-Only TPD Allocation: Given the impact of network upgrades on deliverability in the Cluster 13 GIDAP and the scope of upgrades approved just thereafter in the 2022-23 TPP, CAISO should consider applying any improvements to interim deliverability to Cluster 13 as soon as possible. This will allow shovel-ready projects to move forward quickly, address the current scarcity of available capacity, and avoid detrimental impact to California ratepayers. SCP supports NextEra’s proposal to allow Cluster 13 projects that convert to energy-only out of necessity to compete on a level playing field for deliverability in the next GIDAP reflecting approved upgrades. Many Cluster 13 projects, including one contracted by SCP, still have off-takers that expect full deliverability and only converted to energy-only to avoid being purged from the queue. Their energy-only status is not an indication of a lower commercial need for deliverability—-in fact, most of these resources will not be built unless they are granted full deliverability.
   
• SCE Study Process Improvements: Although SCP does not directly interface with the interconnection request process, it is very appreciative of the suggestions by stakeholders to simplify the interconnection process by reducing study time and minimizing required resources. In particular, Southern California Edison’s proposal to use generic load flow and dynamic models by technology type through Phase II and reduce other superfluous data requirements in the interconnection request application that require extensive validation seem like a very reasonable starting point. Other stakeholder suggestions such as investigating the use of cloud computing and other advanced technologies should also be explored, but simplifying the process where appropriate should be a primary focus.
   
• LSA Option B Reform: LSA’s proposal to reform Option B is a practical solution for enabling developers to pursue projects that are outside areas with planned transmission capacity. Given the reluctance of developers to elect Option B in the past, it makes sense to address the barriers LSA flags including compensation for system benefits, transparency on CRR revenues, FCDS guarantees, and the right to forfeited security postings from developers sharing an upgrade.

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

• Shell / Savion Auction Mechanism: SCP is not confident that the auction mechanism proposed by Shell and Savion will enable interconnection of the resources LSEs need to meet decarbonization targets. SCP is also concerned that an auction mechanism will increase the market power of large developers with more financial resources—potentially leading to reduced competition and higher costs for ratepayers. An auction mechanism will favor resources that have minimal risks outside interconnection and are highly financeable, but make it harder for projects that are critical for meeting climate and reliability targets, like geothermal and offshore wind, that have long project cycles or other development and execution risks.
   
• VISTRA Subscription Model: SCP supports the concept of expanding interconnection options for projects, but is not convinced VISTRA’s subscription model will provide a meaningful solution to relieve the current queue backlog. As a load serving entity, SCP would likely only consider contracting with subscription resources that have a high market value (e.g., out-of-state wind, geothermal, or offshore wind) that can justify the project-specific costs that would be directly passed along to its ratepayers. These same projects likely provide important capabilities to the grid at large, and would preferably be identified in CPUC resource planning for upgrades and funded by the TAC. Given the CAISO’s and PTO technical resource constraints, it is important that any new subscription model does not divert significant resources from progressing non-subscription interconnections. SCP believes LSA’s Option B reform is a more practical pathway for developers to pursue interconnection beyond available grid capacity.

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

As discussed in prompt 1, SCP strongly supports incorporating LSE input into the prioritization or gatekeeping of interconnection requests. Including LSE feedback is the best pathway to align the resource mix studied with the types of projects that are most likely to be contracted. Assessing LSE interest based on PPA status is not appropriate given that most California projects are unable to secure PPAs before achieving deliverability. SCP also has concerns with using letters of interest as a source of input, given it could allow for more vocal LSEs to have outsized influence on the queue. Instead, SCP recommends implementing an election process that mimics the RIC election process, where LSE’s influence is calibrated to load share. Below is an example of how SCP envisions a fair process playing out:

Step 1: Interconnect MW Allocation
The total study limit MW is determined by aggregating the total available capacity to be studied and each LSE's load share is used to assign MW points for LSEs to use for project scoring.

Available Capacity: 400 MW

Step 2: LSE Allocation and Scoring

LSEs are allowed to assign their MW points to projects in the queue with a maximum value set at a project's capacity. The ratio of a project's total interconnect points from all LSEs is compared to its capacity to develop a ratio (NOTE - this ratio can be > 1 if a project has high LSE interest). The resulting ratio is used to rank projects and a commerciality score (total of 100 points) is assigned based on that ranking. Using a ranking vs. normalizing from a ratio avoids a project with extremely high interest adversely impacting the scoring and sensitivity of subsequent projects.

Step 3 - Apply Commerciality Scoring with Other Criteria for Selecting Project Eligibility

The projects are ranked by applying a commerciality score from LSE allocation alongside scoring for other considerations such as site control, permitting, and resource diversity. The total score will prioritize eligibility for a project to move forward.

This process could be implemented after Phase I study results are available to calibrate cost estimates, as suggested by CalWEA. Or if the CAISO sufficiently expands transparency of grid constraints upfront, there may be sufficient information to allow LSE input to be reliably incorporated before starting the interconnection process. If FERC Order 2023 prevents LSE input from being applied as criteria during interconnection, SCP strongly recommends that a similar framework be explored in the upcoming stakeholder initiative to reform deliverability allocation.

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

SCE commends the CAISO for undertaking a collaborative approach to dramatically revise the currently unsustainable interconnection process.  SCE is grateful for the opportunity to provide the following comments.

SCE supports the CAISO’s Concept 1 – qualification process for determining projects studied for Full Capacity Deliverability Status (FCDS) by using a scoring system based on commercial viability criteria (CVC) to select projects up to some multiple of the amount of available transmission capacity in each preferred zone.  CAISO’s Concept 1 coupled with SCE’s  complementary proposal to implement generic technical models to perform the Phase I and Phase II studies will both help to filter out non-viable projects before they enter the IR queue and will provide useful and timely information to the developer on whether to proceed with its project once it has entered the queue. Under SCE’s generic model proposal, interconnection customers (ICs) would request a capacity amount (in MW) and provide the POI, technology, type, and gen-tie information and PTOs would scale power flow and dynamic files accordingly. Key elements to SCE’s generic model approach include the need to consider an updated cost cap methodology such as the establishment of the cost cap in Phase II (like QC 14), increased commercial viability requirements, and higher withdrawal penalties.

Regarding commercial viability criteria, SCE proposes the two pillars and sub-categories identified below to rank and select projects to enter the interconnection queue.  In alignment with the CAISO’s stated goal(1), SCE’s proposed viability criteria are “based on metrics that demonstrate a project’s level of development maturity and readiness for proceeding to construction and should be the foundation of an appropriate scoring mechanism.

Project Viability

• Project Site
  • 100% Site Control/Site Exclusivity
  • POI and requested bus position
  •  Short Circuit Duty (SCD) Impact
  • Gen-tie status: existing or ease of routing the proposed gen-tie to the POI
• Permitting
  • Environmental and permitting status
  • Conditional Use Permit (CUP)
  • Community support: support letter from the city/county; Site Plan approval from city/county
• Construction
  • Design progress: preliminary engineering, single line drawings, etc.
• Technology
  • Commercial viability of proposed technology at utility scale
• Project Finance
  • Access to capital
  • Sponsors that can provide letter of financial support

Developer Viability

• Experience
  • For example, IC has at least one member of the development team that has completed at least one project of similar technology and capacity to the IC capacity requested
  • For example, IC has at least one member of the development team that has begun construction of at least one other project similar to the project planned at the POI requested

2) Queue management

 Support 

• SCE supports the following CAISO queue management proposals to have non-viable projects removed from the queue:
  • Update the project modification process to limit the use and timing of modification requests and increase the deposit amounts.
  • Improve the timeline and process for submitting and completing limited operation studies (LOS). SCE believes LOS requests submitted 9 months in advance of the project’s Initial Synch date in the LGIA may be feasible but submitting a LOS request too early could trigger the need for a LOS restudy if system assumptions change.
  • Hold projects in the queue more accountable and remove cluster projects which: have been in the queue more than seven years; projects with stale/outdated milestones; and projects in the queue which have surpassed their in-service date through consideration of the following changes:
    • Limit time-in-queue with hardline and strict deadlines
    • Viability criteria and time in queue
      • Provide CAISO greater authority to hold projects accountable based on time in queue and COD/milestone extensions, not whether another project is impacted
      • Limit projects’ ability to linger in queue; intent to force progression to GIA execution, Notice to Proceed, construction, and commercial operation
      • Establish stronger milestones and documentation requirements for meeting construction, permitting, and other criteria
    • Require negotiations consistent with existing timelines
    • Consider adding 4^th (new 3^rd) IFS posting at two years from study results being published. (75%), following TPD allocations, parking opportunities, etc.
    • For shared network upgrades, all projects must post their share of financial security by the earliest date of one of the projects.   SCE conditions its support on if this proposal also would apply to projects that “park” and are sharing NUs with other projects in the same queue cluster.
    • Create limitations for projects with EO deliverability status
    • Forego cost caps for project in the queue after 7 years
    • Remove suspension rights
    • Establish limitations and requirements around Transmission Plan Deliverability (TPD) transfer
    • If MMA is required to modify milestones due to IC delay, then IC has 20 BD to submit the MMA request or is penalized $1,500/day until received by the CAISO (penalty must be paid within 10 BD of notification)
    • GIA and future modification results will identify a specific date for Notice to Proceed.  If NTP is not received by that date, the project is in breach/withdrawn.
    • MMA allowed:
      • To execute GIA
      • Once final technology/equipment/POI is determined and IC is prepared to procure, (final decisions are made)
      • To align with PPA
      • Addition of BESS
      • 9-months prior to In-Service Date (synchronization)
      • Increase deposits to $30,000
      • Increase time to complete Modifications to 60 days.  While it is not clear if it is part of the CAISO’s proposal, SCE also supports extending the Facilities Reassessment Report (FRR) timeline from 45 to 60 CDs.
      • Consider a call among the parties if there are issues with data validation
  • SCE would only support a one-time withdrawal opportunity if it is premised on the CAISO’s proposal:
    • “PTOs will not inherit cost responsibility due to withdrawals – waive Appendix DD, section 14.2.2
    • All cost responsibility/shifts will fall to any current or later-clustered project(s) that have:
      • A shared NU, and/or
      • A PNU that the withdrawal project was supposed to fund; cost responsibilities (CCR, MCR, MCE) may increase
    • If this is not acceptable to stakeholders, then the ISO proposes to drop the proposal.”
    • SCE would strongly oppose any withdrawal opportunity proposal which would unfairly transfer the financial risks of developers to PTOs.
  • Expand interconnection requirements for an asynchronous generating facility
  • Revise Attachment 7 (SGIA) to be consistent with Appendix H (LGIA)

• SCE supports NextEra proposals regarding the implementation of new/more stringent requirements such as a new non-refundable entry fee; higher study deposits base on project size; higher deposits for network upgrades (NU) and interconnection facilities (IF); more stringent site exclusivity requirements and elimination of payment “in lieu of”;  However, the higher deposit fees should be set to ensure it does not result in an  excessive reduction in the number of resources entering the queue such that it will ultimately yield an undesirable low number of resources to compete for LSE’s procurement offers.  Finally, higher deposit fees should be used in conjunction with interconnection request intake CVCs to ensure that speculative or non-viable projects from well-heeled developers able to pay the higher deposit fees don’t enter the queue to the detriment of other more viable projects. 

• SCE supports Vistra’s proposed requirement for milestone updates for all projects to maintain valid milestones within a reasonable timeframe.  Without such updates the CAISO should assess penalties and potentially terminate executed GIAs.

• SCE strongly supports LSAs recommendation that the CAISO more strictly enforce the BPM for Generator Management provision, Section 6.5.2.1 (Time in Queue) to remove cluster projects which have exceeded seven years in the queue

• SCE supports the following Gridwell queue management proposals:
  • Address projects that remain in the queue without indication of intent to proceed to COD.
  • Control for future projects lingering in the queue, relying on the pending applicability of 2021 IPE measures

• If the CAISO elects to move forward with Rev Renewables’ proposed “Notice to Proceed (NTP)” process, which SCE does not support – SCE strongly agrees with, and supports, Rev Renewables’ attached condition that “If needed, the PTO would require the first project that issues NTP to post security for the entire network upgrade and not just the cost allocated to this project, so PTO has coverage for the financial obligations to build these upgrades.  As more projects start executing GIAs and issuing NTPs, these projects could reimburse their portion of cost obligation to the first project.”

(1) CAISO 2023 IPE Track 2 Discussion Paper, p. 13

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

1) Interconnection request intake

Oppose

SCE opposes any stakeholder-proposed (AES and New Leaf, among potentially other stakeholders) commercial viability criteria that would include a Power Purchase Agreement (PPA). While it may appear to be a reasonable way to reduce the number of projects within a queue cluster, it forces undue risk on customers. At such an early phase of a project’s overall development, an LSE would not have sufficient network upgrade costs and scheduled in-service date to execute a PPA.  Therefore, LSEs would be making procurement decisions on projects for which the costs and online dates are uncertain. If a PPA is required to enter the interconnection queue, the developers must make an estimate of what the Network Upgrade costs. These estimates feed into the economic analysis of each project’s impact to customer rates; therefore, without certainty on the Network Upgrade costs, LSEs would be executing contracts based on an economic analysis that will most certainly change when resources obtain its LGIA. Along similar lines, with respect to projects’ online date, the developers will be making their best estimates of when they can achieve commercial operation. However, it will not be until the CAISO and PTOs complete their studies that the developers will know when they will achieve commercial operation. Furthermore, requiring a PPA at such an early stage may be a strong signal of potential “gaming” of LSEs procurement processes to simply increase the likelihood of the developer obtaining a TP Deliverability allocation under the current allocation criteria. For instance, one unintended consequence would be for developers to “low ball” offers into RFOs to increase their likelihood of contract execution, and then once signed, the power shifts from the customers of the LSEs to that of the project developer.    

SCE opposes Shell Energy North America’s (Shell) proposal to implement, as a primary screening mechanism, an auction and an optional bilateral exchange to pare down to a meaningful level the number of interconnection requests in a transmission priority zone identified by the CAISO where there is current and/or planned transmission capacity. SCE is concerned with the potential added cost of designing and holding an auction (and ultimate additional cost burden on transmission customers), the potential of only “deep pocketed” developers being able to outbid less capitalized developers, the potential creation of a secondary market for transmission capacity which is paid for by ratepayers, and the potential of hoarding of transmission capacity by the successful bidders which results in the underutilization of existing capacity, an uneconomic outcome, and market power/gaming risk.  SCE may be open to further discussions to explore the merits of a well-designed auction, which properly addresses all of SCE’s concerns, as a secondary tool to further reduce the number of projects to be studied in a preferred transmission zone, after the implementation of a scoring system which uses viability criteria to identify which projects will be studied does not reduce the volume of projects to be studied to a reasonable level.

2) Queue management

Oppose

• SCE opposes LSA’s “Tax Holiday” proposal which would permit a one-time withdrawal opportunity with full Interconnection Financial Security (IFS) release. As for the conditions that could be imposed, LSA identifies “no adverse downstream effect on generators" but does not account for the detrimental impacts of such a proposal on PTOs. SCE opposes the proposal since it would result in an unfair and unjustified shift of financial risks and responsibility from the resource developers to the PTOs.

• SCE opposes Gridwell’s proposal to incentivize lingering projects to withdraw by allowing projects with executed GIAs a one-time opportunity to withdraw and receive all security funds back less costs spent or irrevocably committed.  SCE strongly opposes any proposal, such as Gridwell’s, which would unfairly transfer financial risks from the resource developer to the PTO.

• SCE opposes Vistra’s, and referred to by Rev Renewables’, proposed network upgrade subscription model in the transmission planning process that informs interconnection process TPD prioritization.  SCE is concerned with the potential of having resource developers submitting proposed transmission projects into the CAISO’s TPP when the CAISO has not identified the need for such projects. Further, the proposal for the CAISO to evaluate such transmission projects under the economic studies scenario would be inappropriate since economic studies are typically performed to assess whether the project under consideration would reduce congestion/congestion costs on the grid, not to create additional system capacity for policy reasons such as to interconnect renewable resources to achieve California’s clean energy policy goals (a separate study category under the TPP). Lastly, while it appears Vistra’s proposal is attempting to emulate the Subscriber-PTO model for transmission developer-funded projects such as TransWest Express’ transmission project to bring out-of-state wind from Wyoming into California, Vistra’s proposal is different in one critical aspect – that is, unlike the Subscriber-PTO model, Vistra’s proposal would have ratepayers ultimately pay for such projects by refunding the project costs to the resource developers.  This outcome would be inconsistent with Vistra’s statement that this proposal “reduce[ing] overall costs to customers”.  A more appropriate venue than the CAISO’s 2023 IPE Track 2 to consider Vistra’s  concerning proposal may be in the CPUC’s IRP proceeding.                                   

• SCE opposes NextEra’s proposal for a one-time, penalty-free ability to exit the queue if new rules are applied.  Without accounting for, and properly mitigating, any potential unfair transfer of financial risks from resource developers to PTOs, SCE strongly opposes this proposal.

• SCE opposes Gridwell’s proposal regarding “submit evidence of RFO participation” as an indicator of commercial viability while a project remains in the interconnection queue. Such a condition is too low of a threshold for a project’s viability, considering anybody can submit paperwork into an RFO.

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

1) Interconnection request intake,

2) Queue management

3) SCE offers the following comments on the CAISO’s August 1 Working Group presentation:

Slide No. 21 – Column 2 (Interconnection request requirements) and Column 3 (Selection of Option A and Option B project)

http://www.caiso.com/InitiativeDocuments/Presentation-Interconnection-Process-Enhancements-Track-2-Aug12023.pdf

SCE strongly supports using scoring criteria to select projects up to X% above available and/or planned transmission capacity per identified priority zone, where the actual percentage should be developed collaboratively by stakeholders to ensure a meaningful number of IRs (and associated MWs) is established for technical study purposes without detrimentally reducing the number and diversity of resources available to compete for LSEs’ RFOs. SCE may be open to further discussions to explore the merits of a well-designed auction, which properly addresses all of SCE’s concerns, as a secondary tool to further reduce the number of projects to be studied in a preferred transmission zone, after the implementation of a scoring system which uses viability criteria to identify which projects will be studied does not reduce the volume of projects to be studied to a reasonable level.

lide No. 21 – Column 5 (Competition for PPAs to secure TPD in each zone)

SCE opposes the CAISO awarding TPD allocations to projects on a “first come/first served” basis to those projects having a PPA. Such a structure could have a number of unintended effects. First, it would create a “Race to PPA” amongst sellers and off-takers which may not be in the best interest of customers, and LSEs would want to match timing of any procurement activities/solicitations to coincide with the timing of readiness of the TPD process, which could be restrictive. In addition, PPAs would have to be signed before it is known whether the project has been awarded deliverability.  This could create a situation where LSE’s would need to over-procure/contract to hedge against this risk. Such a structure could also incentivize LSEs to execute more PPAs than they have a need for, but that have specific no-fault termination clauses if deliverability isn’t received, which could also distort the allocation process.

Off Taker Interest – Load share weighted nomination process

As an alternative to the PPA execution “first come/first served” for deliverability proposed by the CAISO during the August 1^st stakeholder meeting, SCE proposes that the CAISO and stakeholder group explore a “Load Share Weighted Nomination Process” to allocate deliverability in each preferred zone.

Under this methodology, when the CAISO is ready to allocate deliverability to projects, the CAISO would provide LSEs with a list of projects in each preferred zone and give the LSEs an opportunity to “nominate” or “vote” for projects they believe should receive deliverability. LSE nominations should somehow be weighted by load share, as larger LSEs have a larger procurement requirement, and may possibly be capped at the same load share percentage. After the nomination process is completed, the CAISO would rank the projects based on the nominations/votes received and projects would be awarded deliverability up to the available capacity amount in each preferred zone.

Such a structure would provide the CAISO with the off-taker interest feedback that is necessary to ensure deliverability is provided to the appropriate projects, without an artificially set PPA execution deadline that could have unintended consequences.

Slide No. 21 – Column 6 (Considerations for Option B projects)

SCE is pleased with, and supports, the CAISO’s determination that the Subscriber Network Upgrade concept is not within scope of IPE process. SCE elaborates on its opposition to this concept above in response to the queue management section under the CAISO’s main question number 2.  This proposal would be more appropriately considered in the CPUC’s IRP or the CAISO’s TPP.

Slide No. 24 – Managing the Queue – Items Under Consideration

SCE appreciates the CAISO’s proposal to withdraw projects from the queue upon the approval of a corresponding TPD transfer, given that, as CAISO points out, only one EO project has achieved COD in the past 8 years.  From a pure queue management perspective, this would be a straightforward approach to remove seemingly non-viable projects from the queue.  However, SCE cautions that there may be a need for a more balanced assessment of the prevailing situation relative to EO projects in the queue and encourages the CAISO to consider the projects through a procurement lens.  LSEs have executed contracts for EO projects to achieve Renewable Portfolio Standard (RPS) and clean energy goals.  Deeming an EO project as not commercially viable could result in fewer renewable resources and could increase the cost of clean energy. If a developer decides to transfer deliverability from a solar project to an energy storage project behind the same POI to meet the needs of an LSE, this should not automatically    be determinant that the solar project is not viable or not needed by the system.  In such instances, the decision to transfer deliverability is based on the commercial needs of an LSE. SCE contends that the solar project may still be needed and additional considerations should be factored in before the project is removed from the queue. Further, as evidenced by the Base Portfolio of the 2022-2023 TPP, there is the need to bring online approximately 12,500 MW (roughly 30% of a total of 40,200 MW in the Base Portfolio) of new renewable EO resources over the next ten years.

1. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals do you think will be most meaningful in addressing the problem statements?

1) Interconnection request intake, 2) Queue management

Vistra is cautiously optimistic that the ambitious goal to drive quickly towards “transformative” interconnection reform that CAISO leadership charted at the beginning of these working group meetings may be attainable. Our optimism stems from realizing that there are key areas of clear consensus or areas of strong consensus that may require some additional development. The CAISO straw proposal for IPE 2023 should be certain to include in its proposal the concepts that received strong stakeholder support or for which consensus was evident. If the CAISO takes this approach to developing its straw proposal, then we are cautiously optimistic there will be enough support for the framework for the stakeholder community and CAISO to collaborate to refine the details to be able to bring this transformative reform to the CAISO Board of Governors no later than February 2024.

We share CAISO’s goal of moving transformative change quickly and effectively. FERC Order 2023 is a recent regulatory development that will impose compliance obligations on the CAISO and stakeholders with requirements that overlap with some concepts raised in the IPE 2023 workshops. In order to achieve that goal, Vistra respectfully requests the CAISO focus efforts on consideration of the stakeholder proposals presented at these working group meetings in light of FERC Order 2023 requirements as a first step before formulating a straw proposal. Given the strong support, or even clear consensus, regarding many elements of these proposals, Vistra believes focusing on a consensus-driven straw proposal consistent with FERC Order 2023 is the best path forward.

Areas of clear consensus that should be included in any straw proposal include:

• Greater data transparency informing viability provided prior to entering the queue: There is clear consensus among stakeholders that early viability information provided prior to finalizing interconnection request submissions is critical and necessary to address the intake challenges. AES, Avantus, Gridwell, Middle River Power, Gridstor, and CalWEA presented concepts that would provide early general viability information. Proposals include an Annual Interconnection Overview Report (AES), Data Transparency (Avantus and Gridwell), information on interconnection capacity available (Middle River Power), proxy cost and duration for projects provided in phase I results publicly for each zone to inform LSE consideration of potential interest (CalWEA). In addition, Order No. 2023 requires transmission providers to publicly post available information pertaining to generator interconnection (i.e., public interconnection information or a heatmap) and to update the heatmap within 30 calendar days after completion of each cluster study and restudy.[1] Vistra believes that any straw proposal must include elements of the stakeholder proposals plus a heatmap as directed by FERC Order 2023 to ensure better information regarding project viability is required as part of interconnection request submissions.
• Automation, standardization, and technological advancement of Phase I or Phase II interconnection studies: There is clear consensus among stakeholders that technology and process improvements to automate, standardize, or adopt technology improvements to increase the speed and accuracy of studies is a critical and necessary element of any straw proposal. Critically, there is also clear consensus that multiple phases of the cluster study process are needed, but that simpler or standardized approaches for the first phase is appropriate. SCE, SDG&E, PG&E, Vistra, LSA, Nextera, and Avantus all proposed concepts to address this need. Proposals include simplified or generic approaches, including models, to initial cluster study phase as well as considering adopting Artificial Intelligence technology advancements or other tools to increase speed and accuracy to perform studies for both PTO and CAISO planners. An important part of these studies integrates with the next item of clear consensus, using viability criteria as criteria for advancing further into the study process. Finally, these proposals all contemplate an end state where it takes about two years to complete the study process. Vistra strongly supports the straw proposal including modeling efficiencies for phased cluster studies similar to these proposals.
• Use of a weighted scoring method to better asses project viability, or readiness, to be used to manage which requests to study bringing the generation amounts into a reasonable level to produce meaningful study results:  There is clear consensus among stakeholders that it is appropriate to develop a robust scoring method to represent project viability/readiness, and that the priority to allowing projects to be included in cluster studies should advance first ready projects first as measured by a viability metric. AES, Intersect Power, New Leaf, Gridstor, Nextera, SDG&E, SCE, PG&E, CalWEA, and Gridwell all provided proposals on viability criteria that could inform a scoring method and the concept of using this metric to manage projects that are prioritized for studies. Vistra believes all of the proposals have merit, and thus CAISO should incorporate elements of these proposals into its strawman proposal to provide for a robust scoring method to prioritize interconnection requests based on project viability/readiness. Across these proposals, stakeholders proposed criteria for a prioritization of projects if needed including:
  • More site control (between 90-100%) or firmer documentation such as ownership/lease rights instead of an option,[2]
  • Demonstration of applicable level of progress on environmental permits,
  • Willingness to pay higher financial security payments above those required by FERC Order 2023,
  • Eligibility to cure local RA deficiencies or areas with LSE experiencing difficulties to meet local RA requirements, or
  • Resources with faster construction timelines.
• Streamlining the Transmission Plan Deliverability (TPD) allocation groups to a single (or fewer groups) and instead prioritize TPD using a weighted viability scoring method to better asses project viability, or readiness:  There is clear consensus among stakeholders that the TPD allocation process should be first allocating TPD to first-ready projects before allocating TPD amounts to less viable projects. First-ready, first-served TPD proposals include revising existing TPD allocation groups to essentially simplify existing allocation groups into a single group, or fewer groups, and then allocate within the single group based on robust scoring method to represent project viability/readiness to allocate TPD to highest scoring projects and downward until TPD is exhausted. NextEra, Vistra, and New Leaf proposed to use viability score for TPD allocation prioritization. We observed clear consensus from stakeholders that the interconnection process should be moving projects forward using the robust viability/readiness scoring method also used for managing projects to be studied more generally among AES, Intersect Power, Gridstor, Nextera, SDG&E, SCE, PG&E, CalWEA, and Gridwell proposals. The AES and New Leaf's viability/readiness scoring proposals can be integrated into NextEra/Vistra concept to help refine specific viability score criteria. As a project moves through the cluster process and into TPD allocation it’s viability score using the robust method should be increasing as it makes progress on development activities, use of a scoring for each project’s viability can also be used by CAISO to flag projects that are lagging in development progress.
• Improvements to better self-build processes that could support both willingness to fully self-fund or partially self-fund network upgrades needed to support Full Capacity Deliverability Status to the funding projects: There is clear consensus among stakeholders that straw proposal needs to include processes to better support partial or complete self-funding o network upgrades. Stakeholders proposed option B reforms (LSA & Rev Renewables) including partial network upgrade subscriptions under "Option B" facilitated by the CAISO (Vistra). If sufficient interest to fund NUs is collectively identified in the current TPD cycle, then proposals include CAISO triggering the NU and allocate the resulting FCDS to projects that collectively funded the NUs allowing the projects to move forward. If insufficient interest to fund the entire NU is indicated, then proposals include CAISO allowing Interconnection Customers (IC) a one-time chance to choose self-build and participate in next year's TPD allocation process with higher priority that could facilitate by a new allocation group for projects committing to contribute non-refundable funds to contribute to the cost of the NU needed in exchange for first priority to the TPD allocation in a new higher group. The remaining TPD would be allocated in the simplified allocation group based on viability score described above. Vistra believes all of the proposals have merit and should be included in the straw proposal such that it includes:
  • Process for CAISO to collect interest from IC to identify whether there is sufficient agreement to collectively self-fund NU to allow the group of projects to move forward and be guaranteed FCDS for its funding.
  • Add a new sub-category in TPD Allocation equivalent to current group A (first priority) to projects that committed to non-refundable contribution to the NU in a previous TPD cycle,
  • Additional protections to manage IC risks that opt into funding NUs should be explored such as those proposed by LSA and Vistra, including clarifications that funding NU will automatically entitle project to FCDS without having to go through TPD allocation process.
• Simplify modeling requirements for certain types of MMA requests: There is clear consensus among stakeholders that the MMA process is overly burdensome and should be simplified. Clearway, Gridwell, Vistra, and LSA all proposed simplifications to the MMA process to improve the ability for CAISO, PTO, and IC to manage projects in the queue. These proposals include simplifying modeling for MMA that include Commercial Operation Date (COD) extensions or adding grid-charging requests. Proposals also included expanding the list of changes that do not require MMA requests and allow RIMS updates for these project updates including inverter changes, gen-tie combinations, and COD extensions (where feasible). Finally, if no model design changes are included in the MMA to no longer require another model validation before approving the changes, because model validation is not needed but a study should be run for the MAA request (e.g., adding grid-charging or COD extensions over certain length of time). Vistra believes all of the proposals have merit and elements of these proposals should be included in the straw proposal to the greatest extent possible.
• Allow a one-time penalty free ability to exit queue "tax holiday": There is clear consensus among stakeholders that the CAISO should afford a one-time opportunity to incentivize projects lingering in the queue because they do not wish to pay a penalty to withdraw. Proposals generally include an opportunity that would provide projects withdrawing a release of their full interconnection facility security payments less costs spent or irrevocably committed. Exiting projects would still be subject to costs incurred to date but would not be subject to loss of deposits for interconnection facilities or network upgrades. SDG&E supports a one-time opportunity but only for pre-QC12 without executed GIAs. Vistra supports the CAISO including a one-time penalty free exit in its straw proposal, however we request the CAISO identify any risks that this could shift onto projects remaining and propose solutions that mitigate those risks in its proposal.

Areas of strong support that should be included in any straw proposal, and may merit further discussion to explore better alignment across stakeholders, are:

• PTO providing better viability information based on prior study results in the scoping meeting: Vistra believes that we saw strong support among stakeholders for the PG&E and SDG&E proposals to provide more viability information in scoping meeting using prior study results. PG&E and SCE proposed expanding project scoping meeting results to provide feasibility information earlier in the process using previous study results. Proposals included adding results for Point of Interconnection (POI) availability; Network Upgrade (NU) scope, cost, duration based on past studies; Reliability NU capacity constraints; expected timelines for planned/active Interconnection Reliability NU projects and capacity projects in the area and expected timelines for Area Deliverability NU and Local Deliverability NU required for FCDS. Vistra strongly supports the scoping meeting results expanding to include this information and this should be included in the straw proposal.
• Withdrawal penalties should be refined to send better signals to withdraw earlier if the results indicate the project is not viable: There appears to be strong support that changes to withdrawal incentives or penalties is needed to better incentivize less viable projects to exit sooner rather than lingering. Proposals from SCE, PG&E, SDG&E, and Gridstor included concepts getting at this issue, but stakeholders are divided on wanting higher penalties for projects withdrawing where others emphasize incentives for withdrawing. On this topic, Vistra finds FERC Order 2023 to be firm in its requirements and will help aid in providing certainty on the direction compliance with withdrawal penalty rules even in light of stakeholder differences. Vistra recommends this portion be extracted from the transformative changes and address on compliance.

Vistra is cautiously optimistic CAISO will recognize the clear and strong support demonstrated across the stakeholder community that there is a critical and necessary need for the above elements to be incorporated into any straw proposal. It is important for a robust, well-functioning stakeholder process that can produce a viable proposal to proceed to the Board of Governors for approval that consensus areas are adopted and refined.

Of the 50 concepts that we identified, Vistra generally supports the majority (30/50). While we think it is critical the items with clear consensus or strong support are included, we would be comfortable with the elements we can support being included in some capacity. Please see Attachment A: Summary of stakeholder proposals and Vistra position. This spreadsheet includes a summary of the stakeholder proposals presented in July 2023, and Vistra’s position on whether the elements should or not should not be advanced in the straw proposal.[3] The concepts with a “S” in Column 4 titled “Include in Straw Proposal? (S=Support, O=Oppose, N=Needs to discussion)” are proposals that Vistra supports. We request CAISO consider advancing these concepts in any straw proposal and commit to advancing the strong or clear consensus items summarized above.

[1] FERC Order No. 2023 at Paragraph 135.

[2] FERC Order No. 2023 requires interconnection customers to demonstrate 90% site control at the time of submission of the interconnection request and 100% site control at the execution of facilities study agreement, or when executing interconnection agreements, described at Paragraphs 583-612.

[3] Please note that Vistra has not updated its review of the 50 stakeholder proposals in this spreadsheet relative to FERC Order 2023. We have noted in these comments summarizing areas of clear consensus or strong support where we see interactions with Order 2023 at this time that merit careful consideration.

2. Of all of the concepts and proposals presented in the Discussion Document and in working groups, what concepts or proposals concern you? Please describe how these concepts fail to adhere to the principles or would not appropriately address the problem statements.

1) Interconnection request intake, 2) Queue management

Of the 50 concepts that we identified, 7 are ideas that Vistra would oppose if included in a straw proposal. Please see Attachment A: Summary of stakeholder proposals and Vistra position. This spreadsheet includes a summary of the stakeholder proposals presented in July 2023, and Vistra’s position on whether the elements should or should not be advanced in the straw proposal. The concepts with an “O” in Column 4 titled “Include in Straw Proposal? (S=Support, O=Oppose, N=Needs to discussion)” are the proposals that concern Vistra. We request CAISO not advance these concepts in any straw proposal.

3. Please provide any suggested modifications to combinations of the proposed concepts, or additional thoughts to meet the principles established for the initiaitve:

1) Interconnection request intake, 2) Queue management

Many of the proposals brought forward had merit as can be shown by Vistra flagging 13 out of the 50 concepts we identified were brought to CAISO as Neutral. Vistra is neutral on these proposals largely because they were either unclear how it would be implemented, or further discussion is needed. We support the CAISO facilitating additional discussions on the elements that need further discussion in parallel to developing a straw proposal.