Comments on discussion paper

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

ACP-California offers limited and high-level comments on the IPE Track 2 discussion paper at this time but looks forward to deeper engagement as the initiative moves forward. In general, while significant work is needed to bring the initiative to a final proposal, we applaud CAISO’s efforts to think creatively about how to reshape the interconnection process and make it workable for all parties while providing better alignment with transmission planning, resource planning, and procurement. ACP-California encourages CAISO to continue to ensure that, as reforms are undertaken, open access is maintained and paths for interconnection of energy-only projects and projects outside of designated/priority zones continue to exist. We also encourage CAISO to continue to consider “commercial interest” not only from LSEs but also other offtakers as it proposes interconnection reforms that consider some type of commercial interest component. Finally, we applaud the CAISO for recognizing that interconnection of many new resources cannot happen without the necessary network upgrades, which have been delayed with increasing frequency and severity. Thus, as requirements are placed on resources to interconnect in a more timely manner, those reforms should not punish generators that are unable to interconnect due to delays in permitting and constructing upgrades by the PTOs. And, to the extent possible, the PTOs should be held accountable for the timely completion of transmission projects.

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

ACP-California generally agrees that significant reforms to the interconnection process are required in order to address the large volume of interconnection requests that have been observed in recent years and to allow for more timely interconnection of new resources to meet state policy and reliability needs.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

No comment at this time.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

ACP-California appreciates the three concepts put forward for consideration in the IPE Track 2 discussion paper. Generally, we believe some combination of the concepts may be the best path forward, but have not had sufficient time to comment in detail on what that combination might look like. We look forward to giving this more consideration and providing more comments as the initiative moves forward into subsequent phases.

In general, while ACP-California supports use of some type of “Indicative Commercial Interest” (as discussed in prior comments in this initiative) to help rank and screen interconnection requests, we do not support the Concept #2 as currently written. We are concerned about the idea of LSEs and other offtakers having the exclusive ability to submit lists of projects for study in the interconnection process themselves. Furthermore, we are concerned about this concept, as presently written, not appearing including a pathway for full open access to the transmission grid, such as an energy-only queue for non-LSE/offtaker supported projects. In general, at this early stage, we believe it may be more appropriate to incorporate LSE/offtaker interest into concept #1 or concept #3.

Additionally, for concept #3, a key consideration to evaluate this concept is the proposed use of auction proceeds. Stakeholders and the CAISO will need to carefully consider the implications of various potential uses.  In addition, we’re concerned that the requirement to commit auction dollars early in a development cycle may disadvantage long-lead time resources that already face significant early capital investment risk several years before any expected revenues. Thus, if this concept proceeds, it would be ideal to focus on potential uses of auction funds very early in the initiative.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

ACP-California will not have had time to develop and present on an alternative methodology for the workshop dates that are currently scheduled, but may be interested in presenting on a concept after having additional time to review and consider the options that have been put forward.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

Advanced Energy United (“United,” formerly Advanced Energy Economy) appreciates the opportunity to submit comments to the California Independent System Operator (ISO) 2023 Interconnection Process Enhancements stakeholder process.

Advanced Energy United is a national trade association with over 100 member companies across the clean energy landscape, from large-scale renewable energy and transmission developers to providers of distributed clean energy resources, grid services and technologies. United members are highly impacted by the ISO interconnection process as both generators and offtakers of clean energy and participants in energy markets.

United is strongly supportive of efforts to reform the current queue process and backlog. The status quo is unsustainable. The current system is resulting in delay, uncertainty, and expense nobody can afford, and it is frustrating state policy and reliability goals.

In general, United supports the ISO’s effort to address the challenge of excessive interconnection requests by tightening the linkage of resource planning, procurement, transmission and interconnection. The California Energy Commission (CEC) Integrated Energy Policy Report load forecast and California Public Utilities Commission (CPUC) Integrated Resource Planning processes are transparent, data-driven, and accountable processes that yield publicly vetted and actionable planning information appropriate to limit the queue intake. Between the CEC, CPUC, and ISO, there is a balancing of policy, reliability, and economic goals that provide strong and defensible criteria for resource need to guide interconnection priority.

United suggests that the proposed effort to reform Interconnection Request Intake by tightening the planning-interconnection linkage include both “operational characteristics” as well as “geographic locations” as outlined in the December 2022 CEC-CPUC-ISO Memorandum of Understanding.[1]

United is also supportive, in principle, of updating the criteria and process for ensuring projects in the queue reflect commercial readiness and balance development timelines and exigencies against transparent and nondiscriminatory milestones.

United understands the outline of reform put forward by ISO is a broad starting point, and substantial work needs to be done to define and debate specific options for achieving both goals. United supports the working group process put forward by ISO and looks forward to being constructively engaged. We believe the timeline put forward by ISO to complete a working group process this summer and prepare actionable proposals in Q3 2023 is doable, and we strongly support the goal of completing a final proposal to be voted on by the Board of Governors by Q4 2023.

Given the scale of the challenge in interconnecting the resources necessary to meet California’s ambitious goals in clean energy and electrification over the next decade, such reform toward a more targeted and efficient interconnection process is clearly warranted.

[1] Memorandum of Understanding between the California Public Utilities Commission (CPUC) and the California Energy Commission (CEC) and the California Independent System Operator (ISO) Regarding Transmission and Resource Planning and Implementation, December 2022, http://www.caiso.com/Documents/ISO-CEC-and-CPUC-Memorandum-of-Understanding-Dec-2022.pdf

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

United certainly agrees that the issues identified in the statement are a problem. We offer two additional points that support the need for reform and place it in a broader context.

• The current process can’t accomplish its own goals, even if resources were not a problem. When interconnection requests in a cluster overwhelm by multiples the existing or planned transmission capacity for an area, study results lose meaning and utility, and the high number of project withdrawals and changes within a cluster further undermine the relevance of each iterative study.
• The process must be reformed to meet state policy and reliability needs not just because the scale of projects overwhelm available staff resources, but also because the scale, location, and operational characteristics of the projects seeking interconnection may not match the needs identified through the state and ISO planning process. Where such a mismatch occurs the state and ISO plans based on those resources, including the IRP and ISO Transmission Plan, are rendered obsolete and ineffective. Put another way, the current weak linkage between state policy and reliability goals and interconnection priority is a problem in itself because it frustrates the efficient implementation of planning and programs at the CEC, CPUC, and ISO, with potential negative implications for reliability, economic, and policy objectives.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

United agrees that the conditions described exist and are a problem. We suggest that the statement could also reference the difficulty applicants experience under the status quo, including: understanding the likely “real” queue size and process timeline, the expense, uncertainty, and delay caused by inconclusive study results and iterative studies, and the difficulty for applicants in pursuing changes to proposed projects.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

• Advanced Energy United is strongly supportive of the goals of strengthening linkage between planning and interconnection. In general, we believe that “right-sizing” the interconnection request intake according to the scale and type of resources identified in the state’s planning processes, combined with nondiscriminatory commercial viability screens, is an appropriate approach that maintains open access.
• United suggests that the high-level proposal (and resulting working group objective) to managing request intake can better reflect the December 2022 CEC-CPUC-ISO Memorandum of Understanding. That MOU commits the ISO to “prioritize interconnection process activities to support the resources with the operational characteristics and geographic locations consistent with the resource planning conducted by the CEC and CPUC, and the transmission planning conducted by the ISO based on that resource planning.” The concept paper put forward by the ISO discusses prioritization based on the latter criterion – geographic locations – but not the former “operational characteristics.”[1] United requests that the concepts for managing interconnection request intake should be modified to include consideration of operational characteristics, and the working groups should be tasked with including this criterion in their development of actionable proposals.

[1] CEC-CPUC-ISO Dec. 2022 MOU, Agreement 11

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

• Advanced Energy United supports the outlined scope and the schedule to complete the initiative by the end of 2023.
• United supports the working group process and looks forward to being constructively engaged.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

AES Clean Energy appreciates the opportunity to submit comments on the IPE Track 2 discussion. AES Clean Energy understands the constraints CAISO staff is experiencing due to an influx of interconnection requests. However, AES Clean Energy cautions the CAISO from drastically changing the interconnection process under a short timeline without the ability for stakeholders to vet the CAISO’s concepts and alternative proposals thoroughly.  As discussed on the June 7^th stakeholder meeting, it is essential to consider and agree on the principles and problem statements before jumping into proposals. 

AES Clean Energy provides comments on the proposed problem statements and their associated principles below.  AES Clean Energy provides preliminary feedback on the “post-study queue management” concepts and a neutral overview of the “managing queue intake” concepts.

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

AES Clean Energy believes the problem statement associated with new interconnection requests should be refined with a top-down perspective.  The main driver for the increased interconnection requests is the CPUC’s resource procurement goals accelerating the pace of development over the next two decades to meet SB 100 goals. In addition to state policy goals, the current interconnection process's slow timeline, increased participant uncertainty, and lack of transparency have led to an unmanageable interconnection queue. While AES Clean Energy is sympathetic to the overwhelmed critical planning and engineering resources, constrained resources should not be considered the main problem resulting in the need for interconnection reforms.  Accelerated state procurement goals have led to increased commercial interest, resulting in substantially increased interconnection requests that the current interconnection process cannot manage. Understanding that increased interconnection requests are expected to meet the policy goals, the CAISO's current interconnection process must be refined to ensure that only the readiest projects are able to enter and move through the queue. AES Clean Energy recommends refining the problem statement to the following:

“The CAISO has experienced increased interconnection requests to meet the accelerated cadence of resource development to meet the state’s policy goals. The current generator interconnection processes cannot efficiently accommodate all applicants and provide valid timely study results.  Understanding the state policy goals require a substantial increase of clean energy resources to be interconnected annually, the current interconnection process must be redesigned to ensure that only most ready and viable projects enter the queue”

AES Clean Energy believes that Principle 1 and Principle 2 should be amended to reflect AES Clean Energy’s proposed problem statement.  Principle 1 states, “Prioritize interconnection in zones where transmission capacity exists or new transmission has been approved”.   This principle should be refined to reflect commercial interest given that commercial interest is one of the drivers of the busbar mapping process within the CPUC’s IRP proceeding that ultimately feed into the CAISO’s TPP cycles.  Including prioritization by commercial interest into the principle would allow the CPUC planning process to continue to signal resource portfolios based on commercial interest.  In addition, AES Clean Energy does not agree with Principle #2 stating, “Limit the amount of studies to reasonable capacity volumes aligning with state resource planning”.  AES Clean Energy does not believe the CAISO should limit projects to a certain MW limit. Instead, the CAISO should focus this principle on ensuring that the readiest projects are to enter the interconnection queue.  AES Clean Energy recommends the following language to amend Principle 1 and Principle 2:

Principle 1: “Prioritize interconnection the uses existing and/or planned transmission capacity while considering commercial interest in the resource planning and transmission planning processes.”

Principle 2: “Encourage certainty by ensuring the most ready projects enter the interconnection queue.”

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

AES Clean Energy has no comments on the proposed problem statement related to the number of projects in the existing queue but provides preliminary feedback on the concepts for managing the queue post-interconnection studies. 

Item 1: Modification Process Updates

AES Clean Energy primarily supports the proposed policy modifications.  AES Clean Energy endorses the concept of limiting MMA requests to once before the GIA execution and within 12 months before the Notice to Proceed or Start of Construction with the exceptions for requests of project milestone changes, energy storage additions, and gen-tie changes.  However, the CAISO should also consider exceptions for inverter technology changes as changes are made to keep up with IEEE standards.  Instead of making exceptions, the CAISO could also consider eliminating the need for simple changes to constitute a need for submitting an MMA, such as date changes or inverter technology changes.  AES Clean Energy supports requiring ‘notice to proceed’ and other contract milestones be provided or updated in Modification requests and results as AES Clean Energy already does this due diligence in practice today.  In addition, AES Clean Energy supports increasing the study deposit to $30,000 and increasing study times to 60 days to disincentive projects from over-submitting MMAs.  Finally, AES Clean Energy agrees with the April 1^st deadline for MMA requests to add storage as this will align with the TPD allocation process.

Item 2: Limited Operation Study Adjustments

AES Clean Energy highly supports the CAISO’s concept to change the earliest limited operation study adjustment submittal date to nine months before Initial Synchronization.  This proposal would allow the CAISO more process and study times, while developers can submit adjustments sooner in the process.

Item 3: Project Accountability

AES Clean Energy does not support the proposed concept requiring projects transferring their TPD allocation to another project to withdraw from the interconnection queue.  AES Clean Energy supports increased flexibility for TPD transfers and sales, but believes this concept will decrease flexibility for developers.  From AES Clean Energy’s experience, transferring TPD can make projects viable for development and construction.

AES Clean Energy believes the proposed concept for projects with FCDS should be reconsidered. The concept currently proposes projects with FCDS to provide a third financial security and notice to proceed within three years after Phase 2 studies. AES Clean Energy supports providing the third financial security within three years after Phase 2 studies.  However, the CAISO should provide additional time for the notice to proceed, such as five years.  Projects are often awaiting state permits, environmental studies, and purchase agreements to be completed depending on deliverability allocation results.  In addition, AES Clean Energy supports the requirement to require all projects to reach COD by 10 years in the queue, except for projects that do not have deliverability constraints.  Projects that do not have deliverability constraints are not “in the way” of other projects in the queue and should not be subject to the same timeline as have deliverability constraints.

Item 4: Clearing the Queue (One-Time Withdrawal Opportunity)

AES Clean Energy supports the concept’s proposed one-time withdrawal opportunity from the queue. Projects that are in the queue with construction for Interconnection Facilities (IFs) and Network Upgrades (NUs) that have not been started and have not been able to start construction due to deliverability, permits or land issues should be invited to the one-time withdrawal opportunity. CAISO can consider incentives to support projects to withdraw, such as refunding unused deposits of IFs and NUs rather than losing all deposits.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

AES Clean Energy believes each of the three concepts requires further significant details for stakeholder consideration.  Additionally, each concept can only be adequately evaluated once stakeholders agree upon the proposed principles. At this time, AES Clean Energy can provide an overview of the benefits and concerns of each concept based on the provided information. 

Concept 1: Qualification Process for Determining Projects Studied for Full Capacity Deliverability Status and Study Path for All Others

The first concept proposal depends on to-be-determined scoring criteria to split projects into a high-priority and low-priority track for each prioritized transmission zone. The high-priority track is studied for FCDS, while projects in the low-priority track can withdraw or proceed as Option B projects and fund their DNUs. This concept appears to change the interconnection process from today’s processes in the most incremental manner. The scoring criteria are based on metrics demonstrating a project’s readiness level, such as site exclusivity and permit applications. Network upgrade cost estimates may also become more accurate as fewer projects are studied in each priority bucket.  However, the concept attempts to predetermine which projects can be studied for FCDS intensively and eliminates projects down to the available or planned transmission capacity level.  Projects that are not selected based on this scoring criteria process are immediately faced with the option to withdraw or self-fund projects.  Projects that are not selected may still be viable projects but are faced with extreme options due to the attempt to arbitrarily eliminate projects in the beginning.  To this concern, the CAISO should allow low-priority projects an opportunity to provide a third-party study to dispute against the determination and be reconsidered as high-priority projects.

To fully consider this proposal further, the CAISO and stakeholders should provide answers to the following questions:

• Where are the prioritized transmission zones and how is the available capacity determined by each cluster cycle?  For example, will CAISO only study projects at POIs that have been determined to have deliverability?  If so, how/when would developers be informed about the amount of deliverability at each POI?
• What are the scoring criteria and how is each criterion scored?
• What happens if the scoring criteria don’t eliminate projects down to the level of available transmission capacity?
• Can low-priority projects be reconsidered as a high-priority projects if a third-party study shows the project’s ability to provide grid benefits?

Concept 2: Only Study Projects Requested by LSEs and Other Offtakers

The second concept requires offtakers to sponsor projects by providing the CAISO with a list of projects to study during the annual open window before phase 1 studies and a refined list before phase 2 studies.  This concept reverses the commercialization process by requiring developers to find an offtaker before entering the interconnection queue.  This concept attempts to meet the MOU’s goal of aligning procurement and interconnection by allowing offtakers to determine development based on their procurement needs.  However, this proposal may result in offtakers being the sole gatekeepers for development, eliminating the concept of an open market. In addition, offtakers may not have the best incentive or enough information to choose the most economical projects as projects are ultimately rate-based back to customers. This concept may also favor larger LSEs as smaller LSEs may not have the resources to replicate power studies and determine the best project for development. While this concept can help determine the most viable project based on commercial interest, it should be considered within Concept #1 as an additional means to enter the queue if projects are not selected as high priority.  Considering this concept alone may result in unintended market power consequences.   Additionally, this framework should ensure that agreements with non-LSE offtakers could towards meeting this queue entry requirement. Non-LSE customers are important customers driving procurement to help meet state energy goals.[1]

Concept 3: Only Study Projects that are Successful in an Auction Process for a Proposed Project

The third concept utilizes an auction process for each transmission capacity zone to determine projects entering the interconnection queue by auctioning the available and/or planning transmission capacity.  This concept would allow the market to assess project development by auctioning deliverability and determining winners. This concept requires data transparency from the CAISO to provide information for developers to replicate cluster and deliverability studies.  Transparency in the TPD process is critical as developers would need to determine their bid structure. In addition to the data transparency needs, this concept needs to be further developed to determine the auction process.  Questions to consider include:

• When would the auction occur?
• How would the available transmission capacity areas be communicated? (i.e. how would developers know where the capacity is between each bus that would be auctioned)
• Would the auction choose the highest bidder or a clearing price mechanism?
• Would auction winners be able to transfer/sell the awarded deliverability to others?
• Would there be any penalties if the auction winner did not produce the resource in a timely manner?
• How would resource attributes be considered in the auction to ensure resource diversity?

[1] The Clean Energy Buyers Association has found that since 2014, Commercial and Industrial Customers have contracted for 64.5 GWs of carbon-free electricity. See CEBA Deal Tracker - CEBA (cebuyers.org)

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

AES Clean Energy does not have a proposal at this time. However, the CAISO should allow stakeholders to elect to present once consensus is formed around the problem statements and principles.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

AES Clean Energy agrees with the CAISO’s assessment that this initiative’s scope is within its Board of Governor’s jurisdiction and does not require the WEIM Governing Body’s authority. Regarding schedule, AES Clean Energy believes that three working group sessions may not be enough time for stakeholders to properly vet through proposals as the principles and problem statements have not been agreed upon. Therefore, the CAISO should schedule additional working groups as the stakeholder process unfolds.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

Avantus respectfully requests the ISO to inform stakeholders of any on-going coordination with FERC regarding this IPE effort, amidst a relatively accelerated schedule where outcome would be applicable to C15 and beyond.

The IPE Track 2 proposal puts focus on state policy and resource procurement goals. With CAISO (and PTOs by proxy) being FERC jurisdictional entities, an over emphasis on LSEs and resource procurement (a primarily state regulated process) may result in misaligned priorities.

This is especially evident in the structure of Managing IR intake – Concept 2, where LSEs/offtake would virtually assume control of the interconnection process. Additionally, this concept eliminates all merchant opportunities and ability to fund Network Upgrades.

Avantus encourages CAISO to consider a more well-balanced and sustainable IR intake solution (e.g., one that encumbers the most beneficial aspects of all three concepts) which consider risks/reward impact for all stakeholders.

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

Avantus agrees that the current interconnection process requires adjustments to better serve all parties involved. However, while the proposed concepts may apply well for C14/C15 type superclusters, none of them by itself are likely to be sustainable long-term.

To elaborate, Avantus finds each of the proposed concepts to overburden one of the three core parties (CAISO, LSE/Offtake, Interconnection Customer) with risks:

Concept 1: CAISO transitions from identifying opportunities for enabling development (via TPP, vis-à-vis TPP 21-22, TPP 22-23), to taking on significant role in deferring new development based on criterion subject to uncertainty.

Concept 2: LSE/Offtake to provide front end direction with limited study information. This has the potential to disenfranchise merchant projects and QFs and are counterintuitive to the principles of PURPA.

Concept 3: Without further details of the structure of auctions, Avantus assumes prospective Interconnection Customers will be burdened with justifying the viability of their proposed projects, using limited study information. This is likely to disproportionately benefit well-capitalized parties.

A sound and sustainable solution should consider, and balance risk levels imposed on each of the core parties involved.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

Avantus respectfully request the ISO to further support this statement with internally available data in aggregated form (e.g., x projects in y cluster that have not issued NTP, deliverability/offtake status).

The publicly available aggregated data (counting to C12) supports the general statement in that there is a substantial number of projects in C08+ that have not withdrawn or come online. The general statement would be better supported if CAISO can expand on which of these projects (in aggregate) have not shown progress (e.g., within months of ISD but no NTP).

*Only counting projects that withdrew after LGIA were executed or terminated

Additionally, CAISO should consider the following contributing factors on QM/Development timelines while refining the final proposal:

• The last few IPE iterations largely addressed shortcomings of predecessor policies and were rendered less effective as soon as new and unforeseen issues arise.
• Legacy TPP/IRP priorities did not always align with GI portfolios/commercial interest.
• CAISO’s Limited Operation Studies policy that did not focus on the MW that projects could instead bring online without waiting for lengthy NUs.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

Please refer to response in 2.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

Alternate proposals for Managing the Existing Queue

- CAISO should strongly consider making Limited Operation Studies available a minimum of 2 years before initial sync date, and earlier if possible. This informs projects of MW that can be brought online before longer lead assigned NUs are in service. This may be instrumental in driving nearer-term activities (that proves commercial viability) such as securing equipment procurement and offtake contracts.

- CAISO should consider making the “one-time” withdrawal a cyclic queue clearing process (3-5 yrs, more frequent if justifiable) where projects can apply to withdraw without financial penalties, provided they meet a certain set of criteria (e.g., no downstream impact, downstream parties agree to assume CANUs)

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

 None

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

The Bay Area Municipal Transmission group (BAMx)^[1] appreciates the opportunity to comment on the CAISO's 2023 Interconnection Process Enhancements (IPE) Track 2 Discussion Paper, dated May 31, 2023, and subsequently discussed in the June 6, 2023 stakeholder meeting. BAMx appreciates the well-thought-out Discussion Paper and intends to continue to participate in the opportunities the CAISO has committed to providing for Stakeholder participation.

BAMx concurs with the need to prioritize and focus 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 in a way to provide efficient and cost-effective solutions for LSE procurement of resources on behalf of their customers.

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

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

BAMx agrees with this problem statement.  The current process leads to inefficient use of limited resources. That process delays meeting the state’s policy goals and burdens consumers with unnecessary costs.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

BAMx agrees with this problem statement.  Projects without offtake agreements and demonstratable development progress should not remain in the queue.  Exceptions to removal from the queue may be required for a project delayed by permitting processes.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

Concept 1: Qualification process for determining projects studied for Full Capacity Delivery Status (FCDS) and study path for all others.

BAMx supports a qualification process built around prioritizing the study of projects that intend to connect to zone’s with existing transmission capacity. One method of prioritizing projects beyond what can be accommodated with existing transmission capacity would be to rank projects by per unit transmission cost to achieve FCDS and prioritize projects with the lowest cost.

Concept 2: Only study projects requested by LSEs and other off-takers.

BAMx supports this concept.  Ultimately the LSEs carry the obligation to serve and carry the responsibility of the cost to their customers.  The LSEs are in the best position to determine the commercial viability of projects if given the proper expected transmission cost by the CAISO.

Concept 3: Only study projects that are successful in an auction process.

BAMx believes the concepts are not mutually exclusive. BAMx believes this option may work out more than the other options, but is less understandable without further analysis/delineation of details.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

Project meeting the following criteria should be prioritized for study:

1. Projects requesting interconnection in zone with existing transmission capacity
2. Projects requested by LSEs
3. Projects which include all transmission costs as part of the generation development and do not request repayment through the transmission access charge.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

BAMx is supportive of the scope and does not have specific comments to the schedule. However, sufficient time for stakeholders to review and provide meaningful comments as proposals are developed is crucial.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the IPE Track 2 Discussion Paper and Stakeholder Call. This initiative is critically needed to ensure the interconnection process can support the unprecedented pace of procurement that will continue as load-serving entities (LSEs) procure new capacity to meet procurement mandates and as the state progresses toward Senate Bill (SB) 100 goals.

Section 3 of the Discussion Paper includes four principles the California Independent System Operator (ISO) proposes to prioritize interconnections and to increase the efficiency of the interconnection process. While CalCCA supports these principles, any policy change contemplated within this initiative must also adhere to a fifth principle: Enhance the interconnection process’s ability to support the pace of procurement necessary to meet California Public Utilities Commission (CPUC) resource portfolios and California Energy Commission (CEC) SB 100 portfolios. This principle is first and foremost and should guide the other four principles and resulting policies. CalCCA makes the following comments on the other four principles:

Principle 1: Prioritize interconnection in zones where transmission capacity exists or new transmission has been approved.

Prioritizing interconnection requests that are located in zones with existing or approved transmission capacity could reduce uncertainty around where to locate projects without the need for costly and timely upgrades. This prioritization must be coupled with (1) regular reporting on where existing transmission capacity exists on the system, and (2) existing projects in the queue that would not require network upgrades to interconnect. This information will help developers narrow down their interconnection requests to where they are most likely to receive deliverability allocations and inform LSE procurement. The ISO has provided some of this information periodically[1] and should do so regularly so developers and LSEs have up-to-date information on prospective projects that have the best chance of interconnecting and obtaining deliverability without major upgrades.

Principle 2: Limit the amount of studies to reasonable capacity volumes that align with state resource planning.

Experience with recent interconnection study clusters has revealed that the volume of interconnection requests and high withdrawal rates results in less meaningful studies that can be delayed due to the need to restudy with the new mix of projects. Limiting study amounts to reasonable capacity volumes that align with the volumes called for in state planning could improve the meaningfulness and efficiency of the study process if it allows the projects that are studied to complete milestones that point to the project moving along the process and eventually reaching COD. The ISO and stakeholders must carefully consider what capacity volumes provide a “reasonable” buffer above state resource planning targets to avoid limiting the amount of new capacity studied too much. This is essential for two reasons. First, the state must interconnect an unprecedented amount of capacity between now and 2045, and having an adequate buffer is critical to ensure these targets can be met factoring in risks of project delays, withdrawals, etc. Second, having an adequate buffer to maintain competition among projects in the queue is crucial to support customer affordability during this time of significant investment in energy infrastructure.

Principle 3: Align interconnection and transmission plan deliverability (TPD) processes and LSE resource procurement functions. 

Aligning the interconnection process, TPD allocation process, and LSE procurement functions is critical to ensuring viable project progress through the queue, obtain power purchase agreements (PPA), and reach commercial operation. A project’s deliverability status is a key factor LSEs look to in determining whether to execute a PPA, as deliverability is necessary for LSE to count capacity towards their CPUC procurement mandates and towards their RA obligations. Certainty about projects’ deliverability status will decrease the risk of LSEs pursuing unviable projects. The ISO and stakeholders should consider how potential interconnection process reforms will provide more certainty earlier in the process as to whether a project will have deliverability without the need for costly and timely upgrades.

Principle 4: Enhance the post-study queue management procedures, including the modification request and other processes and project accountability.

As discussed in response to question 4, it would be helpful to understand the root causes behind why projects linger in the queue without development progress or why projects withdraw from the queue. Understanding these root causes will help develop policies in accordance with this principle.

[1]             See: http://www.caiso.com/Documents/Briefing-ResourcesAvailable-NearTermInterconnection.pdf. 

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

CalCCA strongly agrees that the ISO’s interconnection process must be revised to accommodate the increased volume of requests that must be completed to successfully achieve the resource build necessary by 2045 to support SB 100 targets. These revisions should focus both on prioritizing the requests received and enhancing the ISO’s ability to accommodate more requests overall.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

CalCCA agrees improvements to the interconnection process are needed to ensure projects that complete the study process move along to reach commercial operation as expected. It will be necessary to understand why projects that complete the study process do not move along timely through the next stages of the development process to develop targeted policy solutions.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

At a high level, each of the three options has the potential to improve the ISO’s ability to move projects through the queue more efficiently. CalCCA plans to provide additional comments on the three concepts for managing interconnection request intake after participating in the working groups. In the working group process, the ISO should start by identifying the root causes of the problem statements identified in questions 2 and 3. For example, a root cause of the problem statement identified in question 3 could be uncertainty and costs associated with obtaining deliverability. After identifying root causes, the ISO and stakeholders can work to identify targeted solutions that focus on the elements of the process contributing to these problems.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

CalCCA has no alternative proposals at this time but looks forward to discussing the proposals put forth by the ISO and stakeholders during the working groups.  

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

CalCCA supports the working group process outlined in section 7 of the discussion paper and looks forward to participating.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

CESA appreciates the opportunity to provide feedback on the California Independent System Operator (CAISO or ISO) discussion paper regarding Track 2 of the 2023 IPE initiative. We also support the ISO’s decision to issue this paper with the intent to stimulate discussion among stakeholders regarding the problems the initiative seeks to address and the potential concepts that could be further developed for that purpose. In the spirit of fostering conversation around the elements included in the discussion paper, CESA submits the following high-level comments:

• The ISO’s problem statement should include recognition of the need to bolster planning and engineering resources.
• CESA offers feedback and reactions to the Concepts presented in the Discussion paper but refrains from formally endorsing or opposing any of the Concepts at this time.
  • Concept 1 warrants further investigation, but decisions surrounding Options 1 and 2 will have an impact on its timeline and competitiveness.
  • CESA has strong reservations regarding Concept 2 as written since it shifts the power of shortlisting to off-takers and creates cost risks for projects.
  • CESA has some reservations regarding Concept 3 since it is novel, complex, and could become a race to the top that limits competition and increases ratepayer costs; to avoid that, the ISO could wait and look at developments in other jurisdictions (Federal, other RTOs).

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

The ISO’s problem statement should include recognition of the need to bolster planning and engineering resources

CESA appreciates the ISO’s work to try and identify a concise problem statement that captures the extraordinary circumstances faced by participating transmission owners (PTOs), the ISO, developers, and load-serving entities (LSEs) with regards to QC 14 and 15. Overall, the ISO’s proposed problem statement captures that given the increase in commercial interest and interconnection requests, these are unprecedented circumstances. Nevertheless, the problem statement is overly focused on the means to redesign or revamp the interconnection process in order minimize the applications considered and does not include consideration of ways the ISO and PTOs can bolster their planning and engineering resources. In essence, the problem statement assumes that the “critical planning and engineering resources across the industry” are fixed and at capacity, thus framing the problem as one solely focused on limiting the consideration of applications. In order to better reflect the issues at hand, CESA recommends the following problem statement:

“The massive increase in commercial interest to serve California loads has resulted in a surge of interconnection requests that have overwhelmed current critical planning and engineering resources across the industry. In order to meet the accelerated cadence of resource development now needed by the state on a sustained basis, planning and engineering resources must be bolstered, and the current generator interconnection processes must be substantially redesigned to be more efficient and meet State policy and reliability needs.”

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

CESA agrees with the problem statement above as it fairly represents the challenges associated with managing projects within the queue and looks forward to further refining the matter with other stakeholders within the working group process.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

In this section, CESA provides our initial high-level comments and reactions to the three Concepts explored in Section 4 of the Discussion Paper. At this time, CESA does not categorically endorse or oppose any of these concepts, but we do have certain reservations regarding Concepts 2 and 3 as described in the Discussion Paper. In addition, we encourage the ISO staff to be cognizant of the Federal Energy Regulatory Commission’s (FERC) Open Access Transmission Tariff (OATT) requirements and consider how all the Concepts described in the Discussion paper could potentially conflict with the OATT.

In this context, CESA hopes these initial comments can help ISO staff and other stakeholders inform their participation in the upcoming Working Groups, as well as any alternative proposals stakeholders put forth in the coming weeks. CESA urges the ISO to thoroughly consider alternative proposals by stakeholders within the Working Group process so as to avoid prescribing the potential solution to any of the three Concepts described in the Discussion Paper.

Concept 1 warrants further investigation, but decisions surrounding Options 1 and 2 will have an impact on its timeline and competitiveness.

In Concept 1, CAISO proposes the use of a qualification process for determining projects studied for Full Capacity Delivery Status (FCDS) and a study path for all others. Within this concept, the ISO proposed categorizing interconnection requests by the TPP zone to which each project is seeking to interconnect and two potential options to consider for the study process and TPD allocation (i.e., Option 1 & Option 2). While the concepts and options proposed by the ISO still need further discussion and development, CESA believes that Option 1, which proposes to “study interconnection request megawatts (MW) in each zone that in aggregate are somewhat greater than the available transmission capacity” might result in extensive stakeholder debate regarding the eligibility criteria; considering that the main hurdle developers face to be studied for deliverability under both Option 1 & 2 will be meeting criteria that will be developed to demonstrate a project’s level of development maturity, as discussed in section 2.1 of Concept 1.

By contrast, Option 2 within Concept 1 proposes to study twice the amount of interconnection request MWs than what is available or planned in each zone. Compared to Option 1, Option 2 might reduce the potential extensive and contentious debates when developing the scoring criteria for projects competing to be studied as mentioned in section 2.1 of Concept 1 (i.e., Step 1). However, the downside to Option 2 as mentioned by the ISO is that Option 2 would require extra time to complete the TPD allocation using the current process. This being said, the potential benefits of Option 2 when compared to Option 1 heavily outweigh the cons. For example, studying twice the MWs than what is planned or available in a zone would require extra time to complete TPD allocation, but it would allow for greater competition and could subsequently lead to significant cost-minimization since the number of projects being studied and considered will be approximately double than what is proposed in Option 1. This would give LSEs a bigger pool of high-quality projects to contract with compared to the limited pool that Option 1 would yield.

Importantly, should CAISO decide to pursue either Option 1 or 2 within Concept 1, CESA urges CAISO to not develop a scoring criterion as mentioned in section 2.1 Step 1 that includes requiring a PPA to demonstrate a project’s level of development maturity. As previously mentioned by CESA and other stakeholders in previous comments within the 2023 IPE initiative – requiring a PPA to demonstrate a project’s level of development maturity would be a non-starter for developers in California and will lead to increased project costs and low-quality projects being procured. That said, CESA strongly urges the ISO to refrain from entertaining the possibility of using a PPA as a metric to demonstrate a project’s level of development maturity prior to the completion of Phase II studies and more importantly if coupled with the priority zone approach.

CESA has strong reservations regarding Concept 2 as written since it shifts the power of shortlisting to off-takers and creates cost risks for projects.

The CAISO has proposed a concept that would “only study projects requested by LSEs and other off-takers” which in theory, would help manage interconnection request intake. While CESA appreciates any and every effort made to manage the queue, Concept 2 raises multiple concerns.

First and foremost, CESA believes that Concept 2, as proposed by CASIO, substantially hands the power of choosing winners and losers via the shortlisting process over to the off-takers, essentially make them the sole gatekeepers of development. Having LSEs and other off-takers provide a list of projects before entering Phase I studies that “would be limited to twice the capacity in the LSE’s procurement target” results in an overwhelming amount of power for off-takers and limits the process’ ability to find cost-effective developments and potential upgrades. Additionally, developing a process that fosters the appropriate amount of transparency, which will inevitably be requested by stakeholders if such a proposal is adopted, could be counterproductive and result in further delays to the process as a whole. Considering that the backlog in the interconnection queue and the delay of study completion has been partly due to the lack of resources available to the industry, including the LSEs, developing a transparent process that provides answers as to why certain projects were chosen by LSEs and other off-takers prior to Phase I studies would likely result in added work for said LSEs that will only perpetuate the issues with limited resources. As a whole, CESA believes that having off-takers shortlist projects would have little impact on process efficiencies and significant effect on costs. This is due largely to the fact that off-takers don’t know the true economics of each project that has not completed interconnection milestones, and as such they are likely to over-procure to deal with this lack of information. As a result, it is likely that Concept 2 would necessitate a similar volume of engineering work while short-listing projects that are not necessarily economic.

All things considered, CESA strongly opposes Concept 2 as proposed by the CAISO, given that this approach would be more counterproductive in the grand scheme of things, would add more work to already resource-constrained LSEs and would tilt the scale of resource planning and development almost fully to LSEs.

CESA has some reservations regarding Concept 3 since it is novel, complex, and could become a race to the top that limits competition and increases ratepayer costs; to avoid that, the ISO could wait and look at developments in other jurisdictions (Federal, other RTOs).

In Concept 3 the ISO proposes using an auction process for each transmission capacity zone where capacity is available. While CESA sees some potential in an auction approach to manage the volume and quality of interconnection requests, it is important to consider that this approach could  be overly complex to develop and it could become a race to the top, raising costs for development and limiting participation to a smaller subset of developers and projects.

An auction mechanism could serve to manage the volume of interconnection requests entering the queue, but it is clear that the potential benefits of such a framework would be greater if this approach had been prior to the opening of QC 15. If stakeholders had known from the beginning that an auction mechanism would determine whether projects can move forward towards deliverability allocation it is feasible that the number of requests would have declined as developers would have been aware of the need for additional capital to advance each of their requests. As such, the ISO should consider whether development of this mechanism is timely and if it would actually allow for a more expedited intake and processing of requests.

It is also important to note that the framework put forth in Concept 3 would have to be extensively developed to avoid any unforeseen consequences that can arise from such an approach. For example, an auction approach could create a race to the top by heavily relying on the financial resources available to each developer which could result in a significant advantage for a subset of projects. As such, development of such a framework could be time-consuming since it will be essential to design it in a way that would provide every developer a fair opportunity to be competitive within the auction in order to have their project studied, while materially increasing the certainty of developers that move forward in the auction process.

With this in mind, CESA believes that the auction approach’s complexity and its limitations make it so that the best course of action could be to wait and see how such an approach would be implemented in other ISOs/RTOs. It’s CESA’s understanding that this concept has been considered in other jurisdictions, including at the Federal Energy Regulatory Commission (FERC). In this context, waiting to see how this approach would play out in other regions might be the best course of action. That said, while CESA believes that an auction approach could meet the goals of the ISO for interconnection request management, it could be more effective if adequate time and thought are taken to develop the framework and then apply it to future clusters (i.e., QC 16 and beyond).

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

CESA provides no comments at this time.  

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

CESA provides no comments at this time.  

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

Calpine appreciates the CAISO’s dilemma – balancing the interests of open access while efficiently processing an interconnection queue that must be coordinated with transmission planning.  We look forward to participating in upcoming workshops. 

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

This problem statement accurately characterizes the CAISO’s dilemma.  However, Calpine believes that Cluster 14, while tardy and possibly somewhat fictional, is on track for processing and should not be retroactively affected by the changes suggested.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

This statement is factually correct but does not highlight the problem.  If the intent is to “clear the queue”, you might consider adding the following sentence to the end: “This backlog of projects that are not moving forward to operation creates delays, uncertainty and confusion for viable or contracted projects that have followed.  Realization of the state’s policy goals might depend on the CAISO's ability to clear the queue of stalled projects.”

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

Calpine understands the CAISO’s motivation to limit the quantity of interconnection requests that it processes. 

Concept 1 is possibly workable with a few points of clarity:

• The CAISO must be much more transparent about the description of the zones or hubs within which it will process requests.  The LCR Technical Report could be a reasonable reference, where local areas are identified by substations or line elements described clearly as “in” or “out”. 
• There must be reasonable exceptions to the general rule of limiting valid request to areas with “existing or planned capacity”.  While there may be other examples identified in workshops, certainly repowers of existing resources (with retained deliverability) should be allowed to progress without limitation. 
• The CAISO might consider the temporal issue associated with planned transmission.  That is, when would the CAISO accept an interconnection request in a zone which has planned transmission, but the transmission will not be in service for 10 years (like some of the planned 500 kV TPP additions?)  5 years prior to COD? 2 years prior?  How would the 7-year clock play into that decision?
• While limiting the allowable interconnection requests to available transmission might make processing more efficient, it also grants the successful interconnection customers significant market power and potentially higher all-in costs.  The ratepayer benefits of a robust, competitive interconnection process – one without narrow limits --  might overwhelm the efficiency created by limiting competition.

Concept 2 institutionalizes monopsony power, reduces competition and encourages buyer self-builds.   It should be abandoned with prejudice.  Placing the very-early choice of interconnection winners and losers in the hands of buyers would increase costs and reinforce some of the same principles of buy-side market power that originally spawned an interest in competition.  It endorses the possibility, perhaps the inevitable outcome, of buyers preferring to build themselves. 

Concept 3 is just to conceptual to evaluate.  However, using price to ration a scarce resource is a principle worth exploring in workshops. 

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

No Comment

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

Calpine looks forward to workshops where these conceptual proposals can be explored in more detail.  A measured pace of exploration is advisable and acceptable given that Cluster 14 and earlier projects represent a sufficient quantity of resources to meet all near-term needs of the state. 

Much more work and analysis needs to be devoted to the proposals to "clear the queue".  For example, MMAs are a necessary evil.  They take time and money, no doubt.  But in a rapidly evolving technological environment change will happen.  Inverters change, interest in storage duration will change and modifications to CODs are inevitable in this environment.  Rather than limiting MMAs -- particularly when 99 percent of them are approved (per the ISO's May 2023 Cost Report) -- the CASIO should consider expanding the list of allowable modifications.  In the same vein, limits on post-COD modifications should not affect progress on other queued projects because, well, operational projects are no longer in the queue.  While they do take (or could take) study time, post-COD modifications will reduce the need for entering and further clogging the queue. 

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

Clearway supports the principles for interconnection reform presented by the CAISO at the June 7 stakeholder meeting, including the goal of aligning the interconnection process with the policy-driven resource and transmission planning process. The interconnection process must keep pace with the state’s need for an unprecedented amount of new generation. Achieving this will require streamlining the interconnection process to be able to manage a higher volume of applications, as well as prioritizing projects that are aligned with policy-driven portfolios.

Clearway’s comments on the discussion paper are summarized as follows:

• The problem statement on managing interconnection request intake should note the need to handle a higher volume of projects and megawatts going forward.
• The problem statement on queue management should also address the need to ensure that viable projects can remain in the queue, including projects that are waiting for the completion of long-lead-time transmission upgrades.
• Among the concepts for managing interconnection request intake, Clearway supports exploring variations on concept 1 in the stakeholder process. Alignment with the policy-driven resource portfolio used in the IRP and TPP process should remain a guiding principle for this effort.
• Among the discussion paper’s proposals related to queue management, Clearway supports the one-time withdrawal opportunity but does not support the proposed limitations in the MMA and LOS processes. Rather than limit projects’ options to request changes, the CAISO could reduce the study burden associated with MMAs by reducing the list of changes that require a detailed analysis, based on data on past MMA requests.
• Clearway urges the CAISO to address the timing challenges facing projects waiting for long-lead-time transmission upgrades to provide deliverability. In parallel with potential improvements to the deliverability assessment methodology in that stakeholder initiative, the CAISO should implement changes to the TPD allocation timeline and associated commercial readiness requirements in this initiative.

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

This problem statement should more clearly note the need for the revised interconnection process to be able to handle a significantly higher volume of projects and megawatts in a timely manner. While Clearway acknowledges that the current size of the queue is too large for existing processes to handle, the growth in the queue is not irrational – it is driven by the state’s need for new resources. The CPUC’s current resource portfolio calls for an average of 7 GW of new resources to be added annually between 2023 and 2035 (86 GW total by 2035). The revised interconnection process must be able to support this unprecedented build rate through 2035 and beyond.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

Clearway suggests also noting the need to ensure that viable projects are able to stay in the queue, including projects sited in zones where new transmission capacity has been approved but will take many years to complete. 

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

Clearway supports exploring variations on concept 1 in the stakeholder process. Generally, Clearway supports the concept of prioritizing projects that are aligned with the locations, quantities, and technologies identified through the resource and transmission planning processes. All projects will benefit from more realistic studies that estimate upgrade costs based on a realistic number of megawatts aligned with policy-driven portfolios.

Within concept 1, the timeline for securing and retaining deliverability requires further discussion among stakeholders. For many projects in Cluster 14 and beyond, deliverability will only be available on the system once major network upgrades are completed. As noted in the “Timing Challenges” discussion in the introduction to the issue paper, it may not make sense for LSEs and developers to sign binding contracts and commit to pricing now for a project that will be completed 8-10 years in the future. Clearway supports exploring alternatives to this timeline as this proposal evolves.

Clearway’s concern with concept 2 is based on our experience contracting with a broad range of LSEs and other customers in California. Our experience is that price and schedule are by far the two most important factors informing LSEs’ resource selection decisions, and neither of these is known at the start of the interconnection process. However, it would be reasonable to have LSEs’ demonstrations of interest inform the ranking of project readiness as projects proceed through the process.  

Clearway does not support moving forward with concept 3. The results of an auction for capacity would likely reflect differences in the cost of capital or financial structure of project developers, rather than project viability. As with concept 2, there is no way to ensure that this process would result in a set of projects that are aligned with the transmission plan or represent a cost-effective resource portfolio for the CAISO system.

Clearway also offers the following high-level comments on the discussion paper’s proposals related to queue management:

• To reduce the study burden associated with MMAs, Clearway encourages the CAISO to look at historical data on MMA requests and approvals to find ways to simplify the process and reduce the need for MMAs, rather than restricting the ability of projects to request modifications. 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 – over 97% in the last three years.
• Clearway opposes the proposal to limit LOS requests only to those projects without active MMAs. This change would increase risk and delay for viable projects that are waiting for MMA studies to be completed. An MMA request cannot increase the net output to the grid, while an LOS is typically aimed at evaluating the net output to the grid that can be accommodated without certain required upgrades being in service. In most cases, these will not be in conflict and the completion of the MMA will not invalidate the LOS. If a concurrent MMA request is found to be material, the impact should be to hold off or delay the ability of the project to rely on the findings of the LOS.
• Clearway supports the goal of moving non-viable projects out of the queue to leave room for new projects, including the proposal to offer a one-time opportunity for projects to withdraw from the queue and have the unused portion of their IFS postings returned.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

Clearway may seek to present a proposal on an alternative methodology as the stakeholder workshops continue but will make this determination as the initiative progresses.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

Clearway urges the CAISO to address the timing challenges raised in the introduction to the discussion paper within the scope of this initiative, including changes that would apply to projects already in the queue. This timing challenge is likely to affect many otherwise viable projects in the queue, particularly in Cluster 14.

As an example, for Cluster 14 projects entering the TPD allocation process in early 2024, the latest possible timeline to remain in the queue and eligible for deliverability would be to enter in Group D in the 2024 TPD allocation process and sign a PPA by 2026. However, deliverability for many of these projects will depend on the completion of transmission projects approved in the 2022-23 Transmission Plan, many of which have expected in-service dates between 2032 and 2034. Rather than requiring projects to sign PPAs now, the CAISO should delay the TPD allocation process and associated deadlines for these projects until closer to the time when transmission upgrades enabling deliverability are expected to be completed.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

EDF-R appreciates the opportunity to submit comments on the 2023 Interconnection Process Enhancements Track 2 discussion paper. This initiative is coming at a critical time for California’s renewable energy development. EDF-R provides these brief comments in keeping with CAISO’s request that stakeholders not comment on the details of specific proposals CAISO presented in the IPE Track 2 discussion paper.  

EDF-R applauds the CAISO for selecting the 2023 IPE Track 2 initiative for inclusion in the group of stakeholder initiatives pioneering the CAISO’s new working group process. While working groups were always an option in previous iterations of the stakeholder process, CAISO’s decision to specifically highlight and prioritize workshops for problem set identification at the outset of an initiative demonstrates CAISO’s commitment to transparency and collaboration and is sure to lead to effective and well-understood policy outcomes.  

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

EDF-R generally agrees with this problem statement. However, to this point CAISO has only presented proposals in IPE 2023 that substantially redesign how Interconnection Requests are submitted, and has not presented any proposals for making the study process more effective or efficient. In particular, the 3 years it takes CAISO to study an interconnection request is incompatible with the accelerated cadence CAISO acknowledges in the problem statement. EDF-R requests CAISO develop proposal development and workshop time to considering improvements to the study process scope, timelines, and cost.  

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

EDF-R is reluctant to agree with the problem statement as there are too many ambiguities. Unlike the interconnection request process, the queue management process and GIA progress metrics are known and quantifiable. EDF-R requests that CAISO define the following elements of the problem statement with specific quantities:

• “Many” - Here a percentage of executed GIAs do not proceed to COD, or a percentage of projects receiving TPD results do not proceed to executing GIAs would be helpful as we evaluate proposals
• “as expected” - EDF-R asks CAISO to define the root of these expectations – changes occur in IRs for reasons driven by both the Interconnection Customer and the PTO. It seems the most appropriate place for any party to consider timelines firm enough for “expectations” is an executed GIA. Can CAISO please confirm that “expectations” are founded in executed contracts, and not Phase II study results or MMA results?
• “a number of projects”- Please provide insight into these numbers including count of queue positions as well as MW of TPD being reserved in constrained areas
• “near term viability” - Please describe characteristics CAISO sees as indicating viability

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

Concept 1: Qualification process for determining projects studied for Full Capacity Delivery Status (FCDS) and study path for all others

EDF-R observes Concept 1 is only as effective as the qualification process. CAISO did not propose selection process criteria in this discussion paper. EDF-R suggests that criteria development should be a topic at workshops. The only way the merits of Concept 1 can be evaluated is identifying the value and effectiveness of various potential criteria. 

EDF-R suggests that Transmission Zones could be one element of a multi-criteria evaluation. A binary application of transmission zones to completely filter out interconnection requests in particular areas is problematic and assumes that the CPUC busbar mapping process is perfect. Due to the nature of changing commercial interests and development realities, the CPUC busbar mapping process can never be “perfect”. The CAISO’s allowing for interconnection requests in any area is a wise control measure to keep in place in the event that development needs change quicker than the CAISO and CPUC processes. Subsequently, some number of interconnection requests will be positioned with study results and executed contracts, ready to deploy.

It is logical for the CAISO to only study MW amounts that are related to the level of the existing and planned capacity available in the zone (with no zone being at 0 MW). EDF-R looks forward to discussing the merits of how much should be studied. Limiting MW amounts in any case will make Phase I study results more valuable as predictors of actual costs and timelines, and certainly reduce time demands on CAISO and PTO engineering teams.

Concept 2: Only study projects requested by LSEs and other off takers.

EDF-R is reluctant to endorse any plan where LSEs send CAISO specific projects to study. This would be disruptive to the RFO process and may even be anticompetitive. It may make sense for CAISO to use information about LSE procurement plans to review MW study amounts on short list or under contract in particular zones to ensure their planning is meeting those MW amounts at a minimum, but it would not be appropriate for this information exchange to set or limit MW amounts in particular areas.

When this item is discussed in workshops there should be discussion about how non-LSE PPAs would be considered and accounted for in this framework.

Concept 3: Only study projects that are successful in an auction process for proposed projects

EDF-R agrees with stakeholders on the call that such a process would require the design expertise of a market economist and should not be undertaken without that level of consideration. Such an auction would need to be dynamic, allowing for a bid range and MW range rather than a “flat” offer.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

EDF-R and / or Gridwell consulting would like to present proposals for improving the MMA process to include what is needed and when, consistent with principle 4 “enhance the post-study queue management procedures, including the modification request and other processes and project accountability”.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

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 the CAISO’s “active” queue, and Track 3 being for 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. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

Fervo Energy (“Fervo”) appreciates the opportunity to submit comments to the California Independent System Operator (“CAISO”) 2023 Interconnection Process Enhancements stakeholder process, and commends CAISO and the other signatories of the December 2022 CEC-CPUC-ISO Memorandum of Understanding (“MOU”) for their progress towards achievement of the goals outlined in the MOU, synchronizing resource procurement and transmission planning.

Fervo is a utility-scale developer of geothermal power projects in Utah and Nevada for
delivery into California’s electricity market. Fervo's next-generation geothermal projects will deliver 24x7 carbon-free energy to the California grid. Fervo has executed power purchase agreements (PPAs) with several LSEs to construct new geothermal power projects for delivery into California in response to California Public Utility Commission (“CPUC”) procurement orders. 

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

Fervo recognizes the challenges CAISO faces in responding to increased numbers of interconnection requests and appreciates the CAISO’s willingness to consider major reforms in order to continue to meet its mandate. Fervo strongly supports efforts to reform the current queue process and the resulting backlog. 

As noted by Advanced Energy United in the June 7, 2023 stakeholder call, the MOU instructs CAISO to “seek to prioritize interconnection process activities to support the resources with the operational characteristics and geographic locations consistent with the resource planning conducted by the CEC and CPUC”. While the issue paper clearly lays out processes to prioritize interconnection requests by geographic locations, resource characteristics are not named as a consideration to prioritize. 

If generator interconnection processes cannot accommodate all applicants, it should seek to prioritize those with the characteristics desired by CPUC resource planning or system needs in general: namely, firm, non-weather dependent, and high capacity factor resources. In addition to being specifically named by CPUC in its 2021 procurement order, these resources make more efficient use of limited transmission capacity, providing more “bang” for the proverbial transmission “buck”; in other words, the higher capacity factor of geothermal energy projects enables these resources to provide significantly higher generation for every unit of transmission capacity. Given limited resources and capacity, geothermal energy projects provide more value for investment in transmission capacity, since less transmission will be needed for geothermal projects than equivalent generation from other renewables. 

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

Fervo has previously commented, during Track 1 of Interconnection Process Enhancements 2023, on the proposal to accept or process interconnection requests only in areas where transmission capacity is available or planned (Element 1). Fervo reiterates its position that this proposed reform would ultimately stymie transmission development, increase risk inherent in the transmission system, and discriminate against resources with restricted siting flexibility. 

Requirements for projects to have a PPA or be shortlisted to proceed to phase II study (Element 3) may hinder the development process, ultimately having a counterproductive effect. Offtakers may be reluctant to sign PPAs or make offtake commitments so far in advance of project delivery. Additionally, such requirements compound the chicken-and-egg conundrum, with offtakers requiring developers to provide certainty regarding interconnection before executing a PPA, while offtake certainty is required to proceed through Phase 2 of the interconnection study process. 

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

As noted during the June 7, 2023 stakeholder call, the accelerated timeline of the proposed IPE Track 2 process presents a challenge for stakeholders seeking to participate in the process. 1-week timelines to participate in the stakeholder process are simply inadequate, especially in light of simultaneous processes ongoing at CAISO. 

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

Golden State Clean Energy (“GSCE”) appreciates CAISO undertaking this queue reform effort and agrees with starting track 2 by focusing on guiding principles and problem statements. GSCE proposes the following modification to the principle provided by CAISO:

Limit the amount of studies to reasonable capacity volumes of high quality interconnection requests that align with state resource planning.

There is a need to reduce the number of interconnection requests given the study process has been overwhelmed, but California is not best served by a narrow focus on limiting interconnection requests because this alone will not ensure the interconnection requests studied are more likely to reach commercial operation and help satisfy reliability and policy needs. A guiding principle of this initiative should be understanding what makes projects successful at the earliest stages in the study process (i.e., indicia of commercial viability that precedes contracting, which can be an important indicator but not until later in the study process). Readiness criteria that focus on the quality of an interconnection request rather than the quantity will ensure that the limited projects that are studied are the most deserving while helping CAISO manage interconnection request intake.

First limiting future interconnection requests to zones of available or planned transmission is a good starting place. GSCE supports narrowing zones further by focusing on areas with both transmission availability and identified least regrets renewable resource potential with strong state planning support (as discussed in our response to question four). It is important to note that the success of CAISO’s proposal to limit interconnection requests to zones of available transmission relies on proactive transmission planning and new transmission being approved, otherwise some important renewable resource areas will be prevented from being developed.

There are also discussions around further limiting future interconnection requests to a capacity amount that is equal to or double the capacity called for in planning and procurement. Such a capacity limitation creates a major risk of insufficient available capacity in the future because a significant amount of projects that enter the queue (and even those that proceed to Phase II studies) will not be constructed. In addition, such limitations create significant competition concerns in the contracting process that will put LSEs at a disadvantage in negotiations. Improving the quality of interconnection requests will better address these concerns and risks, but it is also likely that CAISO needs to accept for study an amount of capacity that is closer to three times (or more) the planned capacity, and at least one and a half or two times the planned capacity should move to Phase II studies. 

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

GSCE agrees with this problem statement but offers the following additional language in line with our response to question one:

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants. The generator interconnection processes must be substantially redesigned to better limit interconnection request intake and drive higher quality interconnection requests in order to meet state policy and reliability needs. CAISO intends to pursue strategies that allow it to work smarter not longer.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

GSCE agrees with this problem statement but supports the following additional language:

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction. This has led to too many interconnection requests accumulating in the queue that either show no prospect of reaching commercial operation or that have been allowed to linger for far too long, which CAISO must address in order to create meaningful reform and provide future open access.

Many of the existing proposals will ensure that future interconnection requests timely move through the study process, but these proposals do not seem to address projects currently in the queue that show no prospect of reaching commercial operation or that have been allowed to linger for far too long. CAISO needs to propose a process for removing these projects from the queue for meaningful change to occur.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

GSCE supports limiting future interconnection request intake to areas with available or approved transmission. Transmission zones of availability that overlap with least regrets renewable resource areas with strong state planning support should be a particular focus among zones of transmission availability.

We also agree that considering transmission zones alone is an insufficient limit on future interconnection requests. We believe the following provides the structure for a reasonable proposal, building off our response to question one and combining elements of concepts 1 and 2.

• Limit interconnection requests to zones of transmission availability.
• Use a readiness criteria scoring approach to further limit interconnection request capacity to an amount of capacity that is at least triple what appears in planning portfolios.
  • Allow More Interconnection Requests In Least Regrets Renewable Resource Areas. Least regrets renewable resource areas that overlap with available transmission zones need to have plenty of interconnection requests accepted so there is sufficient capacity for procurement entities to choose from, project failures are contemplated, and state land use objectives are realized.
    • The CEC’s land use screens can help indicate state planning support for least regrets renewable resource areas.
    • One way that least regrets renewable resource areas can be emphasized is to only accept a multiple of (triple or more) the capacity that appears in planning portfolios in these areas. Areas with available transmission that are not in a least regrets renewable area could accept interconnection request capacity more closely tied to the portfolios.
  • Establish A Readiness Criteria Scoring Process. The scoring process would be similar to the deliverability allocation process but focus on early stage readiness criteria.
    • Scoring metrics could involve an expression of LSE interest (similar to concept 2); site control; permitting status; procurement of major equipment; and other criteria that stakeholders can agree provide evidence of the likelihood of project success at the earliest stages of project development.
    • The criteria considered should be robust so that different business models and resource types are able to show their value.

Interconnection request intake should not be controlled entirely by LSE-sponsored lists for the following reasons:

• It would unnecessarily accelerate commercial negotiations before relevant project facts are known.
• It would prevent merchant generation from interconnecting.
• There are significant potential timing issues.
  • As observed with the IRP procurement orders, procurement needs can arise without much warning and can require significant capacity additions in a short amount of time. The procurement efforts in response to these past orders would have been significantly more challenging if the queue did not already have projects that were in the middle of the study process and were able to come online in the timeframe required.
• Without a more immediate need to procure, it is not clear what level of scrutiny all LSEs would provide in creating a list of projects.

GSCE generally opposes an auction approach.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

GSCE requests CAISO make explicit the processes that are reliant on track 2 reform and how that interacts with the track 2 timeline. During the June 7 meeting, there was a brief discussion about the possibility of this initiative going beyond December of 2023 if needed. More time may be needed, and CAISO should ensure it has sufficient time to establish an effective and well-supported interconnection process.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

Reforms to CAISO’s interconnection process will only achieve California’s policy goals and maintain grid reliability if they update both (1) the ways project developers obtain and maintain their interconnection queue status and (2) the approaches transmission providers and CAISO take for processing applications for interconnection service. CAISO’s proposed interconnection process enhancements focus on the former but not the latter, as they impose additional requirements on project developers while requiring almost nothing commensurate of transmission providers. CAISO must ensure its reforms meet state goals by adding provisions that address (2) as well as (1).

Like other project developers, we are highly motivated to work with CAISO and other stakeholders to accelerate the pace and reduce the cost of the interconnection process. We expect that won’t happen unless this initiative contemplates changes to address problems that are within the control of transmission providers, which are more determinative of queue speed and completion rates than developer actions. Rationing scarce interconnections alone will fail to meet California’s goals, as there is reason to expect that rates of successfully achieving IA and COD will not increase significantly without corresponding increases in interconnection customer value and certainty.

In contrast, the Federal Energy Regulatory Commission’s pending proposed rule (see Docket No. RM22-14)[1] to improve the interconnection processes emphasizes a balanced approach that imposes additional requirements on both interconnection applicants and transmission providers. For example, FERC’s proposed rule would not only strengthen financial commitments and readiness requirements imposed on project developers[2] but it would also impose penalties on transmission providers that fail to comply with deadlines associated with various studies required as part of the interconnection process.[3] Given that FERC has already collated significant input from diverse stakeholders on challenges that CAISO is describing in the IPE Track 2 initiative—not to mention the likelihood of an order from FERC along these lines in the near future—CAISO would benefit from FERC’s wisdom to improve its proposal by adopting a similar balance.

CAISO should consider updates to interconnection processes that include accountability mechanisms for transmission providers. We recommend the following as starting points for that discussion:

• Require pre-defined timelines for study processes and the construction of interconnection facilities and network upgrades associated with interconnection requests. To the extent that engineering and planning resources are limited, they should be expanded, including through outsourcing to external EPC firms and/or allowing interconnection customers to supply their own studies and build their own interconnection facilities separate from the transmission owner. If study timelines are missed, penalties to interconnection customers for withdrawal at those stages should be greatly reduced or eliminated.
   
• Strictly limit changes to network upgrade costs. Given that the reforms contemplated in this initiative are intended to produce much greater planning certainty—e.g., by steering interconnection requests to target zones, limiting queue entry, and requiring greater demonstration of project viability/developer intent—the risk of high network upgrade costs should not fall entirely on interconnection customers. Additional network upgrade costs assigned to interconnection customers prior to IA should be tightly bounded (e.g., +/-10% of Phase 2 estimates), and interconnection customers should face no post-IA network upgrade costs.

Greater certainty and value in the interconnection process will enable interconnection customers to take actions earlier in the process to demonstrate viability and intent that CAISO wishes to see. In particular, speedier and more predictable processes will enable developers to propose resource adequacy-enhancing resources at more optimal sites within dense load pockets, where site options are often limited to a much shorter timeline and are more costly than sites far from load. Greater transmission provider accountability will enable improved interconnection customer commitments, speeding up the queue process and enabling the highest value projects for meeting state resource needs. Interconnection processes that are costly or risky will, absent greater certainty and value, disincent developers from developing such optimal sites.

Additionally, CAISO needs to differentiate better between interconnection requests that will increase resource adequacy and those that do not. CAISO states its principle is to “Limit the amount of studies to reasonable capacity volumes that align with state resource planning.” TO the extent that CAISO will focus on rationing interconnection, this statement should focus on limiting the number of studies to reasonable deliverable capacity volumes, i.e., projects that increase resource adequacy critical to ensuring reliability goals are met. (We elaborate on this concept in our answer to Question 4).

In addition, CAISO could improve its proposals by quickly elevating the queue management issues ahead of intake reforms. Open access transmission is a bedrock principle of wholesale electricity markets, and CAISO should first pursue reforms that protect the principle of open access. If significantly and quickly reducing the number of lingering projects in the queue will improve outcomes in future cluster studies and better contribute to meeting state policy goals, as well as potentially reduce engineering resources needed in future studies, then CAISO should undertake those actions first.

[1] Improvements to Generator Interconnection Procedures and Agreements, Notice of Proposed Rulemaking,

179 FERC ¶ 61,194 (2022) (“NOPR”).

[2] NOPR at P 102.

[3] NOPR at P 161.

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

This problem statement presents the issue as only one of demand to enter the interconnection process, even though the supply of resources for running the interconnection process is just as important in determining outcomes. The fundamental problem underlying current interconnection challenges is the scarcity of transmission capacity, and we applaud CAISO for recognizing this supply-side problem and engaging in proactive long-term planning to increase transmission capacity. Similarly, the resources available for interconnection study, for example, can be increased and those processes can be improved, in addition to efforts to ration demand—especially farther forward into the future.

CAISO could better describe the problem as follows:

There is an increasing mismatch between requests for interconnection and the resources dedicated to processing those requests. The accelerated cadence of resource development now needed by the state requires actions that better align demand to enter interconnection processes and the supply of resources for interconnection processing.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

CAISO could better acknowledge the balance of responsibilities in the current process for managing the queue. While the problem statement calls out the lack of information from interconnection customers on intent to proceed, it does not similarly call out the uncertainty/delay from transmission providers on study and network upgrade processes. For example, CAISO’s proposals focus on limiting material modifications—but the increasingly lengthy timelines for interconnection processes, which are slower than the pace of improvements in power sector technologies, can be a significant driver of developers’ motivation to update their projects. Moreover, the interconnection process does not match up well with the reality of energy project development, which involves local permitting processes, real estate acquisition and retention, contracting with offtakers, closing financing, and other requirements. As a result, developers must vigilantly manage these activities in a manner that may appear to CAISO as lacking an “indication of intent.”

CAISO could do better to add to the problem description as follows:

The current processes for managing the queue do not facilitate a timely development process because the interconnection process, in addition to being lengthy, uncertain, and expensive, does not align with the project development timelines for permitting, financing, real estate acquisition, long lead equipment procurement, and resource adequacy contracting.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

CAISO’s three different proposals to ration scarce interconnections by increasing costs and capital-at-risk for interconnection customers will be effective in accomplishing their goals—i.e., a speedier process with high completion rates—only if they are complemented by increasing value and certainty for interconnection customers that enter the queue process. Any of these options should provide an exchange of value for that increase cost and risk to be effective.

Option 1: If CAISO plans to move away from open access by using scoring criteria to determine which customers receive FCDS, then it should ensure scoring criteria are focused on the project types and development pathways best suited to meeting the state’s reliability needs.

CAISO’s proposal recognizes that its interconnection reforms must prioritize resources that are most likely to be put into service consistent with the state’s resource planning. Should CAISO score and rank projects based on to-be-developed criteria, CAISO should consider characteristics of a project – specifically, the contribution a particular project makes to resource adequacy and the time it takes to develop a particular project – to ensure that its reformed interconnection process best achieves the state’s policy goals.

Energy storage resources are integral to California achieving its state policy goals while maintaining reliability. Energy storage resources are valued primarily for their contribution to resource adequacy, which is necessary to support the rapid build out of low- and zero-GHG generation, most of which is expected to come from variable wind and solar power. For that reason, California’s most recent IRP relies on 13,571 MW of battery storage by 2032, accounting for 33% of all MW procured by that year.[1] Governor Newsom’s recent roadmap emphasizes “increased amounts of energy storage, including batteries, clean hydrogen, and long-duration energy storage” as a core part of implementing California’s clean energy transition and attaining equity objectives by reducing reliance on gas-fired generation near disadvantaged communities.[2] The CPUC’s recent MTR decision, which seeks another 4,000 MW of NQC by 2028, and the local capacity shortfalls assessed in CAISO’s 2024 Local Capacity Technical Study – amounting to 23,373 MW by 2028 across the 10 local areas[3] – underscore that getting storage online and interconnected faster is critical for reliability.

Additionally, battery storage can be built on a faster development timeline than other resources in the queue, due to its typically smaller footprint and simpler development process than comparable resources. For example, in the aftermath of the Aliso Canyon gas storage facility failure, several battery storage projects were built and brought online in less than 6 months after contract approval. Current interconnection processes are much slower than battery storage resources can be built. Given the central role energy storage plays for reliability and achieving state policies, it is important that CAISO consider interconnection reforms that allow the pace of interconnection to match the required pace of the storage buildout to meet the state’s goals.

Although many resources in the interconnection face similar pressures regarding siting and permitting and obtaining offtake agreements, storage resources are not similarly situated given their reliability values and their short development timeline. These different characteristics support a different approach to enable California to more quickly bring online urgently needed storage resources.

CAISO can rely on FERC precedent for the proposition that prioritizing resources based on characteristics associated with state preferences is consistent with the Federal Power Act.  In 2022, NYISO proposed tariff language prioritizing Public Policy Resources over non-Public Policy Resources, arguing that Public Policy Resources are more likely to successfully enter the market and should be prioritized when there is an approaching reliability need. FERC approved NYISO’s tariff as not unduly discriminatory for placing one set of resources before another.[4] Similarly in CAISO, storage resources, which are prioritized in state resource planning, needed for CPUC’s MTR decision, and are able to be developed on a much shorter timeline are not similarly situated to other resources in the interconnection queue.

A criteria scoring approach adopted by CAISO should put more value on projects that contribute a higher per-MW share to resource adequacy and that can be built with shorter lead times.

Alternatively, there could be a two-part fast track process for storage and other resources that can contributing significantly and rapidly to resource adequacy. First, in addition to identifying priority transmission zones, CAISO could develop engineering criteria that allows developers to site storage with a high degree of certainty where significant network upgrades will not be needed. If a storage resource seeking to interconnect passes such a test, that resource would proceed directly to executing an interconnection agreement. For storage resources that may require significant network upgrades, there could be a separate fast-track cluster process for storage given its need on the system and its short development time frame.

Option 2: GridStor strongly opposes giving offtakers the power to decide which customers are studied, which would be a clear violation of open access principles.

Limiting the study process only to projects for which a load serving entity or other offtaker seeks review is fraught with several problems and unlikely to be approved by FERC. A few select parties—including transmission owners—would have the ability to choose which projects can and cannot enter markets to compete to provide resources to the grid. This flies in the face of FERC’s open access approach that has been a mainstay of national energy policy for more than 20 years. Interconnection rights cannot be limited in such a manner. The prospect or existence of an offtake agreement could conceivably be taken into account as part of the queue management process, but providing one or a small group of offtakers with that significant, asymmetrical bargaining power trivializes the concepts of competition and open access. 

Option 3: GridStor is philosophically open to auctions, provided that additional value and certainty are awarded to winners.

Auctions simply raise costs as a means to ration entry into the interconnection process. However, if the subsequent process remains highly uncertain with respect to timelines and costs, then it is likely that completion rates will not increase significantly. Additionally, since higher costs will increase risk and reduce margins for developers, it is important that interconnection customers receive significant additional value that makes their request more likely to result in commercial operations, beyond simply the right to be studied first.

Auction design is an elaborate topic with academic foundations, and if the CAISO seeks to explore this path, it is incumbent upon CAISO and stakeholders to bring experts in auction design into the conversation to inform what will be a first-of-a-kind approach to interconnection. For example, the “winner’s curse” phenomenon is likely to be common in initial, novel auctions for interconnection, which will result in low completion rates and significantly impede reaching the state’s policy goals; any auction design needs to guard against that outcome being common. Additionally, how CAISO allocates proceeds from such auctions is also a central and critical open question.

[1] See California Public Utilities Commission D.22-02-004, Decision Adopting 2021 Preferred System Plan, 15 Feb 2022, available at https://docs.cpuc.ca.gov/SearchRes.aspx?docformat=ALL&docid=451412947

[2] See Gov. Gavin Newsom, Building the Electricity Grid of the Future: California’s Clean Energy Transition Plan, May 2023, available at https://www.gov.ca.gov/wp-content/uploads/2023/05/CAEnergyTransitionPlan.pdf

[3] See California ISO, 2024 Local Capacity Technical Study: Final Report and Study Results, 28 April 2023, available at http://www.caiso.com/InitiativeDocuments/Final-2024-Local-Capacity-Technical-Report.pdf

[4] “Based on differences in their respective likelihoods of being successfully developed, we find that Public Policy Resources and non-Public Policy Resources are not similarly situated for the purposes of the Part A test and that NYISO's proposed resequencing of Public Policy Resources before non-Public Policy Resources is thus not “unduly” discriminatory.” New York Indep. Sys. Operator, Inc., 178 FERC ¶ 61,101 at P18 (2022)

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

As stated in our answer to question 1, we would welcome the opportunity to discuss corresponding process improvements that are the responsibility of transmission providers and CAISO, beyond those contemplated here just for interconnection customers. By bringing more value and certainty to the interconnection process, these or similar proposals are likely to also enable more optimal developer actions.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

CAISO’s initial timeline for this initiative was deleted, and dates are now only known through early July. We request that CAISO provide a notional timeline for major milestones (i.e., revised straw, draft final, final with draft tariff language) leading up to the expected Board approval date (presumably still December 14, 2023), recognizing CAISO can’t commit to exact dates.

Additionally, understanding CAISO needs a regular, fast cadence of working group meetings, we ask that materials be posted with enough advance notice that lengthy recitations will not be needed on working group calls.

Finally, we request further guidance on how working groups are expected to operate, i.e., will they be purely discussion oriented or will they include some form of polling on various proposals?

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

• QCELLS believes that adherence to tariff mandated timelines is a must when processing queued projects. As such, the CAISO’s problem statement should include the need to bolster planning and engineering resources to meet those tariff mandated requirements.
• QCELLS does not agree with the removal or limitations on suspension rights for developers. Per FERC Order 2003 allowing IC customers “the flexibility necessary to accommodate permitting & other delays that are particularly likely to affect large projects,” suspension rights must remain flexible. Especially under current circumstances, where tariff stated study timelines are not held and LGIP rules are evolving, the current rules regarding suspension must remain. Flexibility for permitting, origination, procurement, is more important, today, than it’s ever been.
• Regarding IC Reform principle, align interconnection and transmission plan deliverability processes and LSE resource procurement functions., how does deliverability and IPE sync?  QCELLS supports the alternative proposal to assign interim deliverability to projects awaiting n-2 related upgrades.

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

• QCELLS believes this problem statement also needs to address fairness. Any process changes cannot be tilted toward transmission providers. QCELLS believes in fair and open access and urges the CAISO to build guardrails against preferential treatment, favorable insider information, or anything else that runs counter to that principle.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

• QCELLS believes the quarterly reporting process for queue’d projects post-LGIA is a necessary and important tool to keep information up-to-date. Stricter enforcement, including forced withdrawal for non-compliance (as a final measure once a good faith attempt has been made by the CAISO) can improve the queue;
• QCELLS would like to better understand how clearing the queue will be implemented. QCELLS recommends clearing of the queue for Clusters 14 and prior since cluster rules for C15 are currently undergoing a stakeholder process.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

Concept 1: QCELLS supports option 2 since less stringent criteria would likely be used, more projects could be studied that would allow for more competition.  Background on Concept 1:  A qualification process for determining projects studied for FCDS and an alternative study for all others.

Without further details, it is difficult to understand if Concept 2 and Concept 3 proposals are feasible. 

1. Concept 2: What criteria for the offtakers to make decisions/making preferential treatment? 
2. Concept 2: Is there an independent monitor/evaluator to offtakers selecting which projects go into phase 1 & 2 studies?
3. Concept 2:  Please explain how this concept reduces timelines, increases efficiencies, and ensures the most cost effective projects since LSEs/offtakers are not in charge of completing milestones and have all equipment pricing, etc.

QCELLS does not support Concept 2 due to limited resources of LSEs & Offtakers, time it would take to develop a fair and equitable process for this idea to be implemented.

Concept 3:  What type of criteria for scoring to get into the auction?  Wouldn’t larger developers with more access to low interest capital and more purchasing power for equipment at lower prices due to large volume order have an advantage over other smaller developers?   This would take sometime to create this design and implement.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

QCELLS will be attending next week’s workshop and proposals will be presented at that time.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

CAISO IPE Track 2 (2021) had a similar timeline with more directed changes (higher fees, PPA requirement changes, rules for parked projects, etc..). Revisions made it through stakeholder rounds just at the end of the allotted time, in large part because several discussions were nixed because of the FERC NOPR – making the overall effort simpler than anticipated. 2023 CAISO IPE changes proposed are less detailed, broader in scope, and at this point – the path forward is not clear, and the # of working groups is not yet decided.

QCELLS urges the CAISO to add in extra comment periods and stakeholder update calls/notices on changing statuses for all working groups. With so many moving parts, it will be difficult to reach consensus on such meaningful reform. That said, QCELLS is confident in the timeline and ambitious scope the CAISO has laid out for Track 2 reform. QCELLS looks forward to being apart of the process.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

Hecate Grid appreciates the effort undertaken by CAISO to address the on-going interconnection related issues that have developed as California moves to decarbonize the electricity sector. 

CAISO’s Track 2 Discussion Paper has one overarching theme – to take the development and siting of renewable and energy storage projects away from experienced developers and replace this with a “central planning” type interconnection structure.  The QC14” and QC15 clusters clearly demonstrate that the current interconnection regime is broken, but CAISO shouldn’t discard a meaningful and valuable process.  Similar to the efforts currently underway at FERC in the “Improvements to Generator Interconnection Procedures and Agreements” proceeding, CAISO should work to further tighten existing interconnection rules under the GIDAP to limit the number of speculative projects entering the queue.

Transitioning to a “central planning” type interconnection structure would pose a number of risks to California’s ambitious decarbonization goals.  Through a thoughtful and robust stakeholder process, CAISO and the developer community must work to address the following risks associated with the concepts put forth in the Track 2 Discussion Paper;

1. CAISO proposes to direct interconnect requests toward approved or pending transmission upgrades.  These transmission upgrades often take ten or more years to permit and construct, and developers would likely wait to start permitting renewable projects until these transmission upgrades are substantially advanced.  If transmission upgrades take ten years to reach commercial operation while CEQA and/or NEPA takes five or more years for a renewable project, then CAISO would find itself managing an interconnection queue with projects that have languished in the queue for more than fifteen years.  The current process works in parallel (developers permit projects in parallel to policy-driven upgrades), but as proposed the timeline would convert to a sequential process that would introduce further delays to projects achieving commercial operation. 
2. The three concepts put forth by CAISO would favor the largest developers and eventually result in an oligopoly that would harm ratepayers through higher energy costs and rates.     

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants because the barrier to the entry to the queue has been set too low. Thus, the process must be substantially redesigned to meet state policy and reliability needs.

Interconnection Customers were still allowed to post a deposit in lieu of Site Exclusivity in QC14 and QC15 and the cost of the deposit in many instances is less than the cost the developer would pay under a land option agreement.  If CAISO wants to reduce the number of projects in the queue, then site exclusivity must be required with the interconnection request or within thirty days of the Scoping Meeting.  The deposit in lieu of Site Exclusivity needs to be eliminated in its entirety from GIDAP. 

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and several projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

“Many projects in the interconnection queue do not proceed to commercial operation as expected” because of the regulatory structure of the queue cluster process itself.  There is very little barrier to entry (such as site control prior to the start of the Phase 1 Study) and once a study has commenced, interconnection customers have very little incentive to withdraw from the queue after making their Initial Posting of Financial Security.  Prior to the 2021 IPE, the conversion of projects to Energy Only created a dynamic whereby developers tended to withdraw projects from the queue after two unsuccessful TP Allocations.  Collapsing the Allocation Groups into four and allowing Energy Only projects to compete at an equal standing as FCDS projects eliminated this dynamic and will lead to a bloated queue where developers have no incentive to withdraw projects unless CAISO provides a one-time mechanism to allow transmission customers through QC14 projects to withdraw from the queue and retain the entire amount of their financial security postings.

Furthermore, CAISO is overlooking California’s highly challenging permitting regime that often imposes significant delays on renewable energy projects.  Depending on the size and scale of a project, navigating CEQA and/or NEPA can take more than five years.

Many projects that languish in the queue “without indication of their near-term viability or intent to proceed to contracting” are not in that position by choice – they’re in that position because they’re waiting for policy-driven upgrades that add incremental deliverability.  As evidenced in the 2022-2023 TP Allocation, the approval of Manning Substation relieved the Gates Constraint and now those projects are immediately able to come online and provide much needed NQC and RA. The lack of policy-driven upgrades, tied to limited planning and engineering resources, through the TPP that relieve deliverability constraints and allow California to achieve its carbon reduction goals present as big a challenge as unviable projects languishing in the queue.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

Hecate Grid strongly opposes a “central planning” type model because of the risks it poses to the renewable build-out and California’s carbon reduction goals as further outlined below. 
 

Concept 1

“The ISO will categorize interconnection requests by the TPP zone to which each project is seeking to interconnect.”

• • What if CAISO identifies a transmission zone and the local jurisdiction places a moratorium on utility-scale renewable development (this happened in San Bernadino County with utility-scale solar)?
  • What if CAISO identifies a transmission zone that is planned but ultimately the approved upgrade(s) is never built or significantly delayed (like most large transmission projects in California)? 

Concept 2
 

“This proposal would rely on LSEs or other offtakers within the ISO providing a list of projects they are interested in being studied to inform their procurement processes.”

• • Ratepayers ultimately win when LSEs can hold solicitations that receive a robust response from a large number of projects and developers.  What CAISO proposes essentially flips the entire contracting process on its head.  LSEs would be required to select projects and developers prior to having interconnection costs and timelines available and prior to any actual development work being done on the project.  Limiting the number of projects in competitive solicitations would harm ratepayers with higher rates. 
  • Solar and wind resources are stronger in certain geographic areas of the state.  How would CAISO prevent all LSEs from allocating their project portfolios to Imperial Valley 220kV for solar and Windhub 220kV for wind?
  • How would CAISO prevent LSEs (namely ESPs) that are also developers from “gaming the system” and selecting their own projects for approval?

Concept 3

“This proposal would rely on an auction process to determine the projects that would proceed into the phase I study process.”

• Hecate Grid strongly opposes Concept 3 due to the discriminatory construct proposed in the Track 2 Discussion Paper.  Concept 3 favors the largest developers and would ultimately result in an oligopoly that harms ratepayers through decreased competition and increased rates. 
• With regards to the ISO’s concepts for managing the queue with the proposal to “Remove suspension rights from LGIA,” Hecate Grid proposes language to limit suspension rights from the LGIA rather than “remove.”

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

The Independent Energy Producers Association (IEP) represents many of the companies that develop commercial-scale generation and storage projects in California.  Project developers have no desire to have their projects stuck in the queue for years, only to be informed that transmission capacity is not available at a commercially reasonable cost.  The CAISO should take steps to provide more information about where transmission capacity and deliverability is available or is expected to be available. 

 The CAISO’s planning perspective should shift to focus on identifying the areas where new generation and storage resources are expected to be needed, rather than studying every project that is located in or connected to the CAISO’s Balancing Authority Area.  The geographic regions that are conducive to development of solar, wind, and geothermal resources (and where additional transmission will be needed) are known, as are areas, including Local Reliability Areas, where additional storage resources could reduce congestion.  The hundreds of projects in the interconnection queue also provide significant information about where developers think new resources should be developed.  The CAISO should incorporate all this information into its Transmission Planning Process and provide specific information about where new generation or storage capacity is needed.  Rather than performing an interconnection study for every proposed project, no matter where the project is located, the CAISO should focus its limited interconnection study resources on the projects that are proposed in areas where new capacity is needed.

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

 IEP agrees that the current interconnection processes cannot accommodate all applicants and that the process must be substantially redesigned.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

The wording of this problem statement and the comments at the stakeholder meeting suggest that the problem is “deadwood,” projects that have no reasonable prospect of being completed but remain in the queue.  However, many projects may remain in the queue while the network upgrades needed to provide Full Capacity Deliverability Status are completed.  Many projects depend on revenues from sales of Resource Adequacy capacity to make commercial sense, and RA capacity requires deliverability and Full Capacity Deliverability Status.  IEP suspects that the queue problem is a direct result of the lengthy time required for interconnection studies and construction of network upgrades, rather than the consequence of inattentive developers leaving their projects to remain in the queue and tie up capital for years.

If “deadwood” is truly the problem, then to the extent consistent with its Open Access obligations, the CAISO should develop the ability to identify projects that are unlikely to receive deliverability, so that developers can pursue other options, rather than waiting several years to find out that Full Capacity Deliverability Status will require unacceptably high costs for network upgrades.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

 Qualification Process for FCDS: This option has some promise if the qualification criteria are clear and appropriate.  As suggested above, if planning focuses more on need and the interconnection process is designed to fill identified need, the queue or replacement mechanism should become much more manageable.  The idea of transmission zones described in the 2022-2023 Transmission Plan is one way to match new projects with expected transmission capacity, but the zones will need to be identified much more specifically.  History can provide some guidance on this issue.  When access to transmission became a problem for Qualifying Facilities after the CPUC’s implementation of PURPA, a transmission “telephone book” that identified the available capacity at each substation helped resolve the backup.  Experienced developers do not want to site projects in locations where obtaining transmission capacity and deliverability will become a decade-long process.

 Only study projects requested by LSEs:  From the perspective of independent power producers, this is a terrible idea.  The largest LSEs are the investor-owned electric utilities who are actively pursuing utility-owned storage and appear to be gearing up to pursue additional utility-owned generation—in direct competition with the independent generators who have efficiently constructed the bulk of the state’s renewable generation, conventional generation, and storage resources.  Giving independent power producers’ competitors the power to kill an IPP’s project through the interconnection process is unacceptable.

Auction: Auctions are a familiar mechanism for reconciling imbalances between supply and demand, and that familiarity makes this option intriguing.  But auctions create an additional cost, which will inevitably be reflected in the cost of power from the facility.  Auctions, like the other concepts, could have the desired effect of culling some projects from the queue, but that also necessarily results in fewer competitors and the possibility of upward pressure on power prices.  Reform of the interconnection process might be a better way of addressing the queue problem.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

 IEP agrees that interconnection process reform should proceed as quickly as possible.  The working group seems to be an efficient way to develop proposed solutions but may require guidance by the CAISO staff to move forward effectively.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

Intersect Power’s positions on the issues raised in the Discussion Paper (Paper) are summarized below.

Managing Interconnection Request (IR) Intake Proposals

Intersect Power does not favor any of the Concepts as described in the Paper. 

• Concept 1 relies too much 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. While tightened linkages among CAISO, CPUC, and CEC are welcomed, Concept 1 indirectly extends the CPUC’s jurisdiction beyond load to the generators as well. 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 Concept 1would eliminate that valuable feedback loop and create a self-fulfilling portfolio outcome entirely driven by the CPUC, lacking any real competitive pressure to challenge planning-level assumptions and their resulting outcome. Furthermore, if the CPUC portfolios were infallible, it’s unnecessary to restrict where developers can file interconnection requests as LSEs wouldn’t encounter more cost-effective projects than those contemplated in the CPUC portfolios.

• Concept 2 places undue risk, burden, and control in the hands of LSEs, which would each have to perform their own potentially complex processes to identify the best projects with no study information at all.

• Concept 3 does the same with developers, which likewise would have to determine the value of different projects without any study/cost information. 

A possible alternative to the CAISO’s proposals would be (1) the institution of readiness criteria and/or additional in-lieu of deposits, and (2) the establishment of a reasonable maximum total queue capacity and maximum number of projects for each Cluster. This approach could achieve the CAISO’s goal of having a more manageable study size, while still maintaining the core framework of the existing study process that has proven effective for more than a decade. The establishment of a maximum total queue capacity and maximum number of projects could be determined by CAISO through an evaluation of past Cluster workloads to ensure each Cluster study cycle can maintain the pre-Cluster 14 study timelines. In the event interconnection requests exceed the to-be established maximums, then CAISO would rely upon the readiness criteria to reject the lowest scoring applications from the Cluster.

Intersect Power also encourages the CAISO to once again consider increasing the study fee and deposit requirements to help minimize the potential for speculative filings.

Managing the Existing Projects in the Queue

Intersect Power understands the need to address existing projects in the queue and is encouraged to see the CAISO address this issue.

The comment template does not ask for detailed comments on the proposals in this portion of the Paper, but Intersect Power provides the brief comments below on those proposals for the CAISO’s information.

Proposals we support:  Intersect Power supports several of the proposals in this part of the Paper, though with revisions that make them more fair and justifiable.  For example:

• Intersect Power supports higher Study Deposits.

• Intersect Power strongly supports allowing earlier Limited Operation Study (LOS) requests.  However: (1) a further extension should be considered, to allow more time for developers to actually adjust their financial, contractual, and construction arrangements; and (2) pending or later MMA requests should not automatically void the LOS results.

• Intersect Power supports extension of viability-demonstration requirements to Energy Only (EO) projects, which still may trigger Reliability Network Upgrades (RNUs) and take up valuable substation bays.  The CAISO already has a credible framework in the Commercial Viability Criteria (CVC), and that framework could be extended to apply to EO projects.  The criteria applicable to EO projects could be the same as those for FCDS/PCDS projects, but the required PPA would not have to require deliverability and should not impose any undue requirements for minimum contract tenor, capacity, or type of product sold (energy or RECs vs bundled).

• Intersect Power supports the “one-time withdrawal opportunity.”

Proposals we oppose:  Intersect Power is concerned that many of the proposals in this part of the Paper are not justified and/or could be effectively addressed through other means.  For example:

• Instead of artificially constraining the timing of modification requests, the CAISO should seek ways to streamline the project modification process.  The CAISO could reduce the number of Material Modification Assessment (MMA) requests by reducing the types of modifications requiring MMA requests, instead of artificially limiting the times when MMA requests can be submitted. It would be helpful if the CAISO could publish data on the quantity and content of MMAs received, breakdown of approvals and rejections by type, and information related to the average time each type took to assess. Without such data, it's difficult possible for stakeholders to fully understand the issues at-hand as well as propose effective solutions.

• The proposed “hard” development time limits, or other punitive measures like removal of cost-cap protection, are unnecessary for FCDS/PCDS projects (where the CVC already apply) and do not consider technologies or situations where even viable projects may require additional time for implementation.

• The removal of Suspension Rights. It is unclear what is driving this proposal, and it would be helpful to have additional background and rationale from the CAISO as to why this is necessary and how often this is an issue.

• The CAISO has not provided any justification for limiting Transmission Plan Deliverability (TPD) transfers.  Intersect Power strongly opposes this proposal. In particular, Intersect Power considers the CAISO’s recent liberalization of the TPD transfer rules to be a significant improvement and encourages the CAISO to move further in that beneficial direction.

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

Intersect Power generally agrees with the Problem Statement, however, disagrees with the conclusion that the existing processes need to the substantially redesigned to meet state policy and reliability needs. Intersect Power agrees that modifications are needed to both the intake process and the process for managing the ongoing queue but believes that said modifications could be accommodated within the existing framework and still achieve the CAISO’s goals.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

Intersect Power has no comments on this Problem Statement.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

Intersect Power does not favor any of the Concepts as described in the Paper. 

• Concept 1 relies too much 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. While tightened linkages among CAISO, CPUC, and CEC are welcomed, Concept 1 indirectly extends the CPUC’s jurisdiction beyond load to the generators as well. 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 Concept 1would eliminate that valuable feedback loop and create a self-fulfilling portfolio outcome entirely driven by the CPUC, lacking any real competitive pressure to challenge planning-level assumptions and their resulting outcome. Furthermore, if the CPUC portfolios were infallible, it’s unnecessary to restrict where developers can file interconnection requests as LSEs wouldn’t encounter more cost-effective projects than those contemplated in the CPUC portfolios.

• Concept 2 places undue risk, burden, and control in the hands of LSEs, which would each have to perform their own potentially complex processes to identify the best projects with no study information at all.

• Concept 3 does the same with developers, which likewise would have to determine the value of different projects without any study/cost information. 

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

A possible alternative to the CAISO’s proposals would be (1) the institution of readiness criteria and/or additional in-lieu of deposits, and (2) the establishment of a reasonable maximum total queue capacity and maximum number of projects for each Cluster. This approach could achieve the CAISO’s goal of having a more manageable study size, while still maintaining the core framework of the existing study process that has proven effective for more than a decade. The establishment of a maximum total queue capacity and maximum number of projects could be determined by CAISO through an evaluation of past Cluster workloads to ensure each Cluster study cycle can maintain the pre-Cluster 14 study timelines. In the event interconnection requests exceed the to-be established maximums, then CAISO would rely upon the readiness criteria to reject the lowest scoring applications from the Cluster.

For Example:

• Referring back to pre-Cluster 14 process, the largest initial queue size was ~42,000MW (Cluster 12 and Cluster 13) and the highest number of projects was ~150 (Cluster 13)
  • These values would serve as the basis for the maximum queue size and maximum number of projects that will be accepted in any given Cluster
• If Interconnection Requests for a given Cluster exceed ~42,000MW or ~150 projects, the CAISO will utilize certain readiness criteria (e.g., site control status, permitting status, in-lieu of deposits) to score projects for inclusion in the Cluster study, with the lowest scoring projects being omitted.

Intersect Power also encourages the CAISO to consider once again increasing the study fee and deposit requirements to help minimize the potential for speculative filings.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

With respect to the scope, as noted above, Intersect Power would like the CAISO to incorporate ways to leverage the existing study process and incorporate protocols for limiting the amount of proposed generation that can be studied in a single Cluster as well as streamlining the modification process, not just place more restrictions on developer flexibility.

Intersect Power supports the workshop format but cannot comment on the schedule at this time, since there are no activities scheduled between July and December.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

LSA’s positions on the issues raised in the Discussion Paper (Paper) are summarized below.

Managing Interconnection Request (IR) Intake proposals

LSA does not favor any of the Concepts as described in the Paper. 

• Concept 1 relies too much on advance determination of criteria that could not possibly encompass all elements of project readiness and, therefore, could exclude viable and beneficial projects. 

• Concept 2 places undue risk, burden, and control in the hands of LSEs, which would each have to perform their own potentially complex processes to identify the best projects with no study information at all.

• Concept 3 does the same with developers, which likewise would have to determine the value of different projects without any study/cost information. 

However, LSA believes that the Concepts in the paper may have elements that could be combined in a different, more effective approach.

LSA has developed a possible alternative framework that would separate the two aspects of the problem caused by the large amounts of IRs and capacity: (1) Unrealistic study results, e.g., large upgrades triggered that ultimately will not be needed; and (2) unrealistic study process, i.e., inability to process over 500 IRs in a reasonable timeframe given existing resources. 

This potential framework is missing implementation details and is not yet supported by all LSA members, but we offer it for discussion as a way to move this process forward.

As described in more detail in the response to Question 5 below, LSA’s potential framework would have:

• The CAISO study only the capacity needed in each area, based on the TPP base portfolios, helping to resolve the problem of inaccurate study results.  (As discussed below, some flexibility could be provided here.)

• The CAISO accept IRs for the number of projects in total only up to the limit of its ability to perform studies in a reasonable timeframe, e.g., the regular pre-Cluster 14 timeline, based on a project readiness-based scoring system that includes room for exceptions on other criteria.  This would help resolve the issue of CAISO/PTO inability to study excessive numbers of projects.

At least enough capacity must be accepted for study in each area to fulfill LSE portfolio requirements, but more capacity can be accepted in each area than there is room for, based on existing and approved transmission.  The accepted projects will be studied for more project-specific upgrades, e.g., Interconnection Facilities, since the total number will not exceed CAISO/PTO ability to study them.   However, the Network Upgrade cost allocation to each project should assume that only the available capacity is used. 

This will allow for competition for LSE contracting (and project attrition) in each area.  If the MOU framework is effective, only the expected capacity amount will be contracted and built.  If LSEs contract for more than the expected amount in a given zone, then the portfolio amounts didn’t consider other elements making the area commercially attractive, and CAISO would approve additional transmission to accommodate it in the annual Transmission Planning Process (TPP).

Managing the Existing Projects in the Queue

LSA understands the need to address existing projects in the queue and has often advocated means to encourage or force non-viable projects out, even before the 7-year development time limit.  LSA is very encouraged to see the CAISO address this issue for the first time since the Commercial Viability Criteria (CVC) were developed.

The comment template does not ask for detailed comments on the proposals in this portion of the Paper, but LSA provides the brief comments below on those proposals for the CAISO’s information.

Proposals we support:  LSA supports several of the proposals in this part of the Paper, though with revisions that make them more fair and justifiable.  For example:

• LSA supports higher Study Deposit to reflect higher processing costs, though they should be limited to complex requests, which cost the most.

• LSA strongly supports allowing earlier Limited Operation Study (LOS) requests.  However: (1) a further extension should be considered (two or more years), to allow more time for developers to adjust their financial, contractual, and construction arrangements; and (2) pending or later MMA requests should not automatically void the LOS results.

• LSA supports extension of viability-demonstration requirements to Energy Only (EO) projects, which still may trigger Reliability Network Upgrades (RNUs) and take up valuable substation bays.  The CAISO already has a credible framework in the Commercial Viability Criteria (CVC), and that framework could be extended to apply to EO projects.  The criteria applicable to EO projects could be the same as those for FCDS/PCDS projects, but the required PPA would not have to require deliverability.  Projects failing the EO CVC would be required to withdraw from the queue.

• LSA supports the “one-time withdrawal opportunity”), at least every 3-5 years.   Projects should be allowed to drop out without financial penalty if they meet certain criteria (e.g., no adverse downstream effects).

In addition to support for the proposals above, LSA also supports closer CAISO monitoring of the required regular project progress reports submitted by developers, and viability demonstrations or MMA requests for COD extensions where it is apparent that projects will not achieve the milestones in the GIA.  For example, LSA is aware of cases where a project may be within months of the In-Service Date and is still reporting that it has not issued NTP or begun construction, but the CAISO has not communicated any issue with the developer.

Proposals we oppose:  LSA is concerned that many of the proposals in this part of the Paper are not justified and/or could be effectively addressed through other means.  For example:

• Instead of artificially constraining modification-request timing requests, the CAISO should seek ways to streamline the modification process.  CAISO could reduce the number of Material Modification Assessment (MMA) requests by reducing the types of modifications requiring MMA requests, instead of artificially limiting times when requests can be submitted, and a more automated process could be used for requests not requiring an MMA that would allow developers to update project details themselves in RIMS instead of requiring the CAISO or PTOs to do so.

• The proposed “hard” development time limits, or other punitive measures like removal of cost-cap protection, are unnecessary for FCDS/PCDS projects (where the CVC already apply) and do not consider technologies or situations where even viable projects may require additional time for implementation.

• The CAISO has not provided any justification for limiting Transmission Plan Deliverability (TPD) transfers.  LSA considers CAISO’s recent liberalization of the TPD transfer rules to be a significant improvement and encourages the CAISO to move further in that beneficial direction.

Summary of LSA positions on proposals for Managing the Existing Projects in the Queue

* The Item 1 proposal to require MMA requests for more milestone updates beyond the usual In-Service, Initial Synchronization, and Commercial Operation Dates (e.g., Notice to Proceed (NTP), Start of Construction, etc.), to encourage development progress, may be an attempt to include a concept earlier suggested by LSA to ensure that projects are moving ahead.  LSA appreciates the CAISO’s inclusion of this idea, but some elaboration might be helpful. LSA’s idea was not to simply require more MMA requests, but rather to ensure that the CAISO more closely monitors project progress and intervenes when projects won’t meet their CODs – see discussion above. 

Additional information needed to support workshops

LSA believes that the following CAISO information would be helpful to facilitate the workshop discussions.

• Evidence that project suspensions are a problem, including the number/capacity of projects that have used and/are using project suspension rights.

• Evidence that TPD allocation transfers are problematic.

• Additional information about available transmission (for interconnection (including open substation bays) and deliverability), including better definition of the electrical boundaries of the transmission zones used in the TPP and the capacity that can be accommodated by each.

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

 LSA agrees with the comments of others at the June 7^th stakeholder meeting that this problem statement should incorporate some mention of: (1) securing more CAISO and PTO resources to manage the study process (“increasing throughput,” as Calpine said); and (2) streamlining the project study and modification process to reduce overall workload and increase efficiency.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

LSA believes that this Problem Statement should also mention removal of other barriers preventing projects from moving forward, such as long upgrade timelines, PTO delays of approved upgrades, and uncertainties regarding the availability of Interim Deliverability needed to support contracting.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

LSA does not favor any of the Concepts as described in the Paper. 

• Concept 1 relies too much on advance determination of criteria that could not possibly encompass all elements of project readiness and, therefore, could exclude viable and beneficial projects, with no recourse included in the proposal. 

• Concept 2 places undue risk, burden, and control in the hands of LSEs, which would each have to perform their own potentially complex processes to identify the best projects with no study information at all.

• Concept 3 does the same with developers, which likewise would have to determine the value of different projects without any study/cost information. 

However, LSA believes that the Concepts in the paper may have elements that could be combined in a different, more effective approach., as described below.  LSA supports the idea of prioritizing projects based on readiness using objective criteria (Concept 1), but supplemented by other processes including LSE nominations (Concept 2). 

Also, both the CAISO concepts and LSA’s potential alternative must address the problem of identifying “commercial interest” (e.g., in new areas) if the number and/or location of Interconnection Requests is limited.  For example, our understanding of the CPUC portfolio-development process is that, in addition to the other factors considered commercial interest – as shown in the CAISO Interconnection Queue – is used to help determine the location of the projects in the portfolio.  This important information will be missing if IRs are not accepted in areas where capacity is not currently expected to be available.

There are also concerns that limiting IR acceptance could conflict with FERC open-access principles.  The CAISO should address this issue.

In addition, the CPUC’s practice of determining portfolio size and location only to the level needed, and limiting procurement directives to that same level, does not leave room for additional resources to compete and raises market-power issues.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

As noted above, LSA does not favor any of the Concepts discussed in the Paper for “Managing Interconnection Request Intake” but believes that some of the elements in those Concepts may provide useful.  LSA’s suggested alternative is outlined below.  As noted above, all the details are not yet developed, and thus the alternative is not yet supported by all members, but some version of this alternative could perhaps be used to address the problems identified.

Summary of LSA potential framework

To address the issues raised in the Paper, the CAISO should separate the two aspects of the problem caused by the large amounts of IRs and capacity: (1) Unrealistic study results, e.g., large upgrades triggered that ultimately will not be needed; and (2) unrealistic study process, i.e., inability to process over 500 IRs in a reasonable timeframe given existing resources.

Unrealistic study results:  The CAISO could address the first issue – unrealistic study results – by studying the amount of capacity in each transmission zone that the CPUC (and other relevant regulatory authorities) provide in their resource portfolios.  Additional increments – e.g., 10%, 20%, 30%, or based on the TPP sensitivity portfolios - could also be studied, to provide additional information about where cost-effective upgrades could accommodate more capacity.

If the MOU works as contemplated, then CPUC procurement directives to their jurisdictional LSEs should come close to matching those portfolios; if LSEs execute PPAs in an area in excess of the portfolio amounts, then that will be a signal to the CAISO to direct more transmission resources to those areas in the annual Transmission Planning Process (TPP).

The framework depends on a close match between the TPP portfolios and eventual LSE procurement, i.e., that the MOU process functions as envisioned.  Also, a transition between the original portfolio-based resource assumptions in each area and the resources that will actually move forward is needed.  

Too many projects:  The CAISO should address the second issue – too many projects to realistically study in a reasonable timeframe (e.g., the normal pre-Cluster 14 timeline) – by separately determining the number of projects it can reasonably study, and then use a combination of Concepts 1 and 2 to determine which projects to study. 

Specifically:

• A transparent scoring system for project readiness, like that contemplated in Concept 1, could be used to select the highest scoring projects in each transmission zone with available capacity.  In addition to demonstrations of financial viability (e.g., actual/potential PPAs – unlikely at this stage anyway – or equivalents), LSA believes that Site Exclusivity/Site Control is a key indicator of project readiness and viability and should be heavily weighted in any scoring system.  Technology compatibility in each area with the portfolio targets should also be considered, especially for technologies that are extremely location specific.

• The scoring system selections should be supplemented, because any scoring system cannot capture all aspects of project readiness or value, through:

• An appeals or other alternative process, e.g., a chance to demonstrate (e.g., through third party consultant studies or other means) that they offer benefits not captured under the scoring framework.  Such benefits could include unique or needed operational capabilities and social benefits related to low-income/disadvantaged areas.  (This method could be used to include for study some projects in areas that currently do not have available transmission but offer other benefits.)

• LSE supplemental nominations of projects in which they have strong interest, as contemplated in Concept 2.  (Given the CAISO’s recent recognition of PPAs with non-LSE, perhaps some accommodation of their interests could also be included here.)

Combination of these approaches:  The capacity in the projects selected for study in each transmission zone should be at least as much as in the CPUC portfolios, but it can safely exceed that amount – even significantly – without jeopardizing the study accuracy.

For example, assume that a transmission zone can accommodate 2,000MW of new capacity, and the project scoring process results in 5,000MW of projects to be studied in that area. 

The CAISO would study only 2,000MW of projects in that area (in addition to any increments deemed desirable) and allocate the costs to the projects studied as though there was only 2,000MW of capacity.  Thus, much more cost would be allocated than the actual cost of the upgrades for the needed 2,000MW.

However, those 5,000MW of projects will now be available to compete for the 2,000MW of authorized procurement contracts (addressing concerns expressed by some if the CAISO only admitted to the process just enough capacity to meet procurement needs).  If the MOU process works, only 2,000MW of PPAs will be signed and ultimately built, and the other 3,000MW will drop out.  If LSEs sign contracts with 2,500MW of projects in that zone, then that is a signal that the area was more attractive than expected, and the CAISO will provide transmission for the other 500MW in the TPP.

Thus, the CAISO/PTOs will only study: (1) the amount of capacity needed (with informational increments as desired), so the study results will be accurate; and (2) the number of projects they can reasonably study, so that number does not exceed their available resources.

Compatibility with proposed Problem Statements and Principles

LSA’s proposal is intended to address the first problem statement, for “Managing Interconnection Request Intake.”  LSA’s proposal would result in study of reasonable numbers of IRs reflecting LSE procurement needs (with the informational increments) and focus on areas with available capacity.

The three Principles related to “Managing Interconnection Request Intake” are summarized below, along with the compatibility of LSA’s proposal above with those Principles.

• Prioritize interconnection where transmission capacity exists or has been approved.  Applicable “zones” would be those in the 2022-2023 Transmission Plan.

Response:  The LSA proposal would prioritize interconnection in zones where transmission capacity exists or has been approved.

• Limit project capacity studied to reasonable amounts that support the state’s resource planning and procurement needs, not “quantities of resources that bear no relationship to the actual level of forecasted demand.” 

Projects studied in Phase II should “demonstrate a high degree of project viability.”  The amount of capacity studied should either be: (1) limited to available capacity (so projects studied have a high assurance of receiving a Transmission Plan Deliverability (TPD) allocation and could immediately market their projects; or (2) greater, to provide for project failure for other reasons, with the available TPD allocated using the current groups or other means.

Response:  The LSA proposal would limit project capacity to reasonable amounts based on LSE procurement targets and available capacity in each zone.

• Better align interconnection and Transmission Plan Deliverability (TPD) processes with LSE resource-procurement functions.  This process should “determine the information required by LSEs at various stages of the procurement process and to ensure that the interconnection study results provide useful information to those functions.”

Response:  The LSA proposal would allow LSEs to supplement the project readiness scoring system with their own project nominations for inclusion in the study process.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

With respect to the scope, as noted above, LSA would like the CAISO to incorporate ways to streamline the study and modification process, not just place more restrictions on developer flexibility.

LSA supports the workshop format but cannot comment on the schedule at this time, since there are no activities scheduled between July and December.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

Middle River Power LLC (“MRP”) agrees that the interconnection process requires reform, but remains leery of reforms that would restrict open, non-discriminatory access to the CAISO Controlled Grid or competition among developers.  MRP also remains leery of moving immediately to radical changes to the interconnection process without first exploring more incremental solutions such as providing better information as to the availability of interconnection capacity and deliverability and increased interconnection fees. Further, interconnection reform by itself is unlikely to sufficiently address future grid needs as the generator interconnection process must be better coordinated with the resource procurement and transmission planning and deployment processes.  Processes that restrict the number of qualified interconnection requests or reduce the size of the current queue must be carefully and thoughtfully designed and administered.  These processes must also be fully transparent.  

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

MRP: On the June 8 call, several stakeholders observed that the size of Cluster 15 was due in part to the expectation that the CAISO may suspend the generator interconnection process, and Cluster 15 may well represent a last chance to submit an interconnection request (“IR”) for the foreseeable future.  MRP agrees with this observation, which means that the size of Cluster 15 was a self-fulfilling prophecy and may not represent what to expect in future clusters.    

MRP also expects that the size of clusters 14 and 15 is due in part to the lack of accurate, actionable information as to where interconnection capacity and deliverability exist on the CAISO Controlled Grid prior to opening and closing the IR windows.  Given the relatively modest fees and site control hurdles for submitting an IR, and coupled with the lack of information about where in the CAISO Controlled Grid transmission capacity and deliverability exists, it is not surprising that the number of IRs has mushroomed. 

The CAISO’s raison d’etre is to operate a bulk power system that leverages, by providing open and non-discriminatory access to that system, the benefits of competition.  Having developers compete to develop new generation resources is a good problem to have.  However, having all of those developers competing on the basis of incomplete information about the capabilities of the transmission system seems a recipe for the current situation.

Though the sheer number of IRs in Cluster 14 and 15 point to the two things noted above and the inability of the current interconnection process to handle such volume of requests, the current “big picture” – namely, developers competing to provide the projects needed to meet California’s policy aspirations but encountering a transmission system, transmission planning process, and IR process completely incapable of handling the resources that are needed – points to need for even bigger reforms than just reforming the CAISO’s generation interconnection process.  Such reforms must seek to integrate regulatory-directed procurement mandates with transmission planning and deployment in ways that overcome the mismatch between wildly different generation and transmission deployment time horizons that continues to threaten procurement mandate timelines.  Given the current mismatch between these critical issues, the coming decade is likely to be a painful one as and until transmission development “catches up” with the demand for new resources.   Nevertheless, California must use that time to better integrate transmission and resource development if it wants to achieve the kind of resource buildout needed to achieve its decarbonization policy goals. 

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

MRP: MRP agrees that the current interconnection queue is clogged with projects that are unlikely to ever be developed.   Though expressed as a second problem statement, this problem is related to the first problem (and, in MRP’s opinion, should be addressed before radically modifying the interconnection process), namely, that the current interconnection process invites and allows the submittal of speculative projects.   MRP supports efforts to remove from the interconnection queue through transparent and objective processes all projects that are unlikely to achieve a commercial operations date (“COD”) nor obtain a power purchase agreement, interconnection capacity or deliverability.    

MRP’s current experience is that the interconnection process can be excessively lengthy and unpredictable. Delays in the review and approval of interconnection applications can significantly hinder the deployment of new resources, such as solar and battery energy storage systems. Long waiting periods can result in missed project deadlines, increased costs, and lost opportunities for making procurement commitments.  MRP believes the complexity of the interconnection process hinders the ability of projects to come online in a timely manner. The interconnection process involves compliance with changing technical standards, land requirements, grid impact studies, and the need for costly upgrades across the study timeline.  The interconnection rules vary across Participating Transmission Owners, creating a lack of standardization and making it challenging for developers to navigate the process efficiently and develop timelines to make the initial COD.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

• Concept #1: A qualification process for determining projects studied for Full Capacity Delivery Status (“FCDS”) and an alternative study path for all others;
  
  MRP: Though a qualification process is unavoidably likely to be very subjective and complex, MRP is open to the concept.  Such a process logically should begin with the CAISO conducting and sharing the results of comprehensive studies based on current transmission system configurations and the draft Transmission Planning Process (“TPP”) plans to assess the grid's ability to integrate additional projects. This information sharing will help to identify areas with limited generation capacity and inform developers on investment decisions via understanding feasibility before the Cluster application window.  

• Concept #2: A process where Load Serving Entities (“LSEs”) and other offtakers select projects for study as an indication of commercial interest in advance of the cluster studies;

MRP: MRP opposes this option.  MRP believes that a process driven by off-takers, many of whom have a direct financial interest in how the grid under the CAISO’s operational control is operated and expanded is the least likely to ensure open, non-discriminatory access to the transmission system. 

and

• Concept #3: A process that selects the projects for study through an auction.

MRP: MRP supports competitive market-based solutions to issues.  Allocating interconnection capacity and deliverability through an auction could be an optimal approach, if the auction is well-designed and well-administered and CAISO has provided sufficient information on available transmission capacity and deliverability.  MRP supports considering this option, but notes that designing such an auction will not be an easy or uncontentious process.   

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

MRP proposes the CAISO implement a process to, prior to the IR window, conduct and present the results of studies that indicate, in numerical terms, where interconnection capacity and deliverability are available on the current grid or where the CAISO expects interconnection capacity and deliverability to be available based on approved transmission projects. These studies should funnel generation development to those areas where capacity exists or is projected to exist.   

MRP also believes the CAISO needs to conduct deliverability allocation studies both more frequently and better aligned with the overall interconnection process.  Ideally, the CAISO should determine and disclose how to ensure the allocation of deliverability on a least cost, best fit basis for “x” amount of capacity each cycle.  This could be accomplished by requiring CAISO to run iterations of their post-Transmission Plan Deliverability (“TPD”) studies using project TPD affidavit rankings and incorporating various combinations of whatever network upgrades are required to ensure “x” amount of capacity is allocated through the TPD allocation process. These necessary network upgrades then would be required to be approved by CAISO and transmission upgrade/expansion project sponsors would be assigned through a competitive solicitation process.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

MRP: MRP is skeptical that an initiative scoped to fundamentally reform the CAISO’s complex generator interconnection process could converge on a consensus or near-consensus solution in time to take that solution to the CAISO’s Board in December 2023. MRP would prefer the CAISO take the time needed to get the new interconnection process right than to take a proposal to the Board on a pre-determined, unrealistic schedule.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

New Leaf Energy, Inc. (NLE) appreciates the CAISO staff’s work on the 2023 IPE track 2 discussion paper (paper) and the upcoming stakeholder process. NLE commends the CAISO’s efforts to begin moving forward with this essential interconnection reform process. Recognizing that the questions presented in track 2 are significant and complex, NLE urges the CAISO to  resolve by December 2023 all issues needed to keep Cluster 15 on schedule, while establishing a subsequent track of the IPE initiative to explore longer-term solutions. 

In order to ensure an effective and efficient stakeholder process, the CAISO should collect and present data needed to both understand current issues with the interconnection process and develop solutions. Data related to the following questions is essential to inform the upcoming workshops:

• With regard to the first concept for managing interconnection request intake, what information will the CAISO use in defining the boundaries of the proposed zones, and what are the zones for Cluster 15? 

• Concerning queue management, what Material Modification Assessment (MMA) requests does the CAISO nearly always accept (e.g., inverter changes)? 

• What are the main interconnection-related causes of project attrition? 

Developers should also present data on this last question to help guide the discussion regarding the appropriate amount of capacity to study.

NLE recognizes that the concepts and proposals presented in the paper are at an early stage of development. NLE does not support any of the paper’s concepts or proposals outright; however, Concept 1 regarding a zonal approach for managing interconnection request intake, described in section 4 of the paper, appears to be the most workable concept of the three presented. In response to question 4 below, NLE provides a number of proposals related to accepting and studying interconnection requests that would help refine Concept 1. 

• NLE supports an increased site exclusivity requirement of 80 percent or greater, which would provide a strong indication of project viability and ensure that speculative projects cannot remain in the queue. 

• NLE suggests that the CAISO prioritize studying interconnecting projects in Local Capacity Areas (LCAs) in order to ensure that local reliability needs will be served by the future resource mix.

• NLE suggests changes to the Transmission Plan Deliverability (TPD) allocation process to prioritize projects that improve reliability or have the least impact on known grid constraints.

NLE agrees with the CAISO that interconnection process enhancements are also needed to manage the interconnection queue. Though NLE does not provide detailed comments on concepts in the section of the paper related to queue management, NLE strongly supports a one-time queue withdrawal opportunity and advocates for a revised MMA process to streamline approvals for project modifications that typically do not require MMAs.

NLE looks forward to engaging in the workshops and associated stakeholder process to further develop these and other proposals. 

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

NLE supports the proposed problem statement. NLE also urges the CAISO to include language in the problem statement recognizing that additional staff and resources are needed to effectively manage and administer the cluster study process.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

NLE supports the proposed problem statement. The statement should also explicitly recognize that project attrition will naturally occur and, therefore, it will be necessary to study more projects than there is existing or planned capacity to accommodate. Many causes of project delays and attrition occur later in the interconnection and TPD allocation processes, 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). Studying more capacity than is theoretically needed will mitigate the risk of falling short of reliability targets because of natural project attrition. 

NLE also strongly supports a one-time queue withdrawal opportunity. This will allow projects that are clearly not viable the opportunity to exit the queue, thus allowing viable projects to take their place. Further, NLE believes there are ways to improve the MMA process by reducing the quantity of modifications that require detailed staff review. NLE suggests that the CAISO create a public, and regularly updated, list of pre-approved equipment changes that do not trigger MMAs. The CAISO should also develop a streamlined, automated process for developers to update their projects when such changes occur without submitting an MMA request.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

Concept 1: Qualification process for determining projects studied for Full Capacity Delivery Status and study path for all others

The paper’s first concept regarding a zonal approach to manage interconnection request intake is the only potentially workable proposal. However, it requires significant analysis and stakeholder input to properly develop. NLE submits the following comments on the proposed zonal approach for consideration and discussion in the upcoming workshops. 

NLE cautions against imposing fixed caps on the capacity or number of interconnection requests accepted or studied in a given zone to avoid open access issues under Federal Energy Regulatory Commission (FERC) Order 2003. Capping the amount of capacity accepted or studied could also lead to under procurement due to project delays and attrition. Overly restrictive queue entry or study limits would result in fewer projects in the pipeline, and because delays and attrition can occur at any time outside of the interconnection and TPD allocation process, the CAISO may be left with more expensive and/or too few viable projects later in the study process. Further, once this limited pool of projects proceeds to load serving entity (LSE) solicitations, they will have disproportionate market power that would lead to higher ratepayer costs. 

Instead, the CAISO should deploy screening criteria to help reduce the capacity of submitted interconnection requests and ensure that the CAISO only accepts viable projects to study. The CAISO and stakeholders should additionally develop the scoring criteria through the upcoming workshops and associated stakeholder process to rank the projects that are able to enter the queue and prioritize them for study. Designing effective screening and scoring criteria should be a central issue for the working groups to resolve. 

The stakeholder process will be essential to establish the necessary project readiness scoring/screening criteria and weighting, and NLE offers some early proposals for consideration here. NLE supports an increased site exclusivity requirement of 80 percent or greater, which would provide a strong indication of project viability. The CAISO should also continuously verify site control throughout the development process. Further, the CAISO should prioritize studying projects in LCAs due to the financial and grid benefits that would result from siting new projects in these areas.

Concept 1 proposes to study only the capacity available in a given zone. NLE seeks clarification that this would be a generic study, not a project-specific one, and requests more information on how deliverability from a generic study could then be allocated on a project-specific level. NLE proposes that the stakeholder process explore generically studying a number of tranches of capacity in a zone in increments of five to ten percent above the available capacity, and the CAISO could award this additional capacity if need is shown. The CAISO, state procurement mandates, an LSE, or a developer–if the reform effort creates an additional process for developer input–could demonstrate such additional need. Studies of additional tranches of capacity could identify cost-effective upgrades that would allow for the integration of more projects, account for project attrition, and lessen the risk of under procurement. Later in the interconnection process, the CAISO could complete project-specific studies and subsequently allocate deliverability based on a project’s ranking using the scoring criteria, which also could serve to prioritize projects in LCAs. 

Finally, as proposed on page 12 of the paper, NLE supports the CAISO considering local capacity requirements and utilizing shift factors (i.e., distribution factors or DFAX) during the TPD allocation process. The CAISO can use shift factors to award deliverability to projects that have the least impact on the grid–ultimately increasing the amount of deliverability available to allocate. Additionally, the CAISO should explore the feasibility of publishing shift factors–as they relate to known, binding constraints–before accepting interconnection requests for the points of interconnection within each zone. This would address the overarching concern with nonviable projects entering and remaining in the queue. NLE proposes that the workshops explore what types of information developers would find useful to increase project viability before submitting interconnection requests, as well as effective means to publish or disseminate this information.

NLE also urges the CAISO to clarify the appropriate venue for issues related to this proposal. It appears that modifications to the TPD allocation methodology are scoped in the deliverability reform initiative, and the resource adequacy (RA) enhancements initiative may consider questions related to local versus system deliverability. Therefore, track 2 of the IPE initiative appears to be the appropriate venue for proposals related to administering TPD allocation (e.g., changes to demonstrations required for a deliverability award, modifications to the four TPD allocation groups, or proposals to prioritize projects providing local RA).

Concept 2: Only study projects requested by LSEs and other offtakers

NLE opposes the second concept proposing that the LSEs submit projects to the CAISO for study. Under this approach, the LSEs would need to perform complex analyses to determine which projects to study, without any outside visibility into the process or opportunities for feedback. This proposal would grant too much control to the LSEs and may violate FERC Order 2003 open access principles. 

Concept 3: Only study projects that are successful in an auction process for proposed projects

NLE does not support the third concept proposing an auction to award available capacity in a given zone. Under this approach, developers would need to analyze the value of projects without sufficient interconnection cost information, which is essential to understand whether a project is viable. Stakeholders should not spend time discussing this concept unless the CAISO or stakeholders more fully develop a proposal outside of the stakeholder process.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

NLE does not plan to make a formal presentation at the first working group meeting but will consider presenting proposals at later workshops.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

Due to the significant questions and complex issues presented, NLE cautions against resolving the entirety of the IPE track 2 initiative by December 2023, as proposed. The CAISO should ensure that adequate time is available for developers to share experiences, concerns, and feedback during the workshops and associated stakeholder process. Instead, NLE supports finalizing all IPE track 2 proposals needed to keep Cluster 15 on track for consideration by the CAISO Board of Governors in December 2023. Other issues may benefit from additional discussion and stakeholder feedback. The CAISO and stakeholders should work together to identify specific issues that are more suited to resolve in a subsequent track of the IPE initiative.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

NextEra Energy Resources, LLC (“NextEra Resources”) appreciates the opportunity to provide comments on the CAISO’s Interconnection Process Enhancements Track 2 Discussion Paper. Consistent with the CAISO’s recognition of the rapid acceleration of clean energy development necessary to meet reliability and policy objectives, and the unprecedented level of resource development activities reflected in interconnection requests to the CAISO, NextEra Resources strongly supports the CAISO’s goal of exploring concepts for significant and transformative improvements to the CAISO’s role in resource planning coordination, transmission planning, interconnection queuing and management, and power procurement. 

Reforming the rules governing the interconnection study process is necessary to filter the interconnection queue in a way that viable -- well-sited and financially healthy -- projects can emerge through a streamlined process. Importantly, while interconnection reform can alleviate the problems associated with a lengthy study process and too many projects in the queue, interconnection reform alone is not sufficient without complementary reforms to streamline transmission permitting and siting processes. All of these elements are required to bring new renewable energy projects to market cost-effectively and on a timeline that facilitates California’s GHG reduction targets. To accomplish this, it is necessary to revamp an interconnection process that was created under much different circumstances than exist today.

While NextEra Resources is supportive of the CAISO’s proposed problem statements related to interconnection intake and queue management, only applying reform measures to cluster 14 and 15 (and future interconnection requests) will negate the CAISO’s broader goal of instituting transformative improvements since the benefits of such reform would not address projects that have been languishing in previous clusters.  Additionally, the CAISO’s proposed principles (as detailed below in question 5) are incomplete without recognizing that access to transmission must be properly valued and reflected in the cost of participating in the interconnection study process.

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

While NextEra Resources is supportive of the proposed problem statement associated with interconnection requests, limiting the application of the statement to clusters 14 and 15 (and future interconnection requests) is inherently problematic.  Without applying interconnection process enhancement (IPE) reform to previous clusters and existing older projects, the potential impacts associated with any process improvements would be so far out into the future that they would not address the immediate problem of an interconnection queue that is overburdened with non-viable projects.  These projects have lingered largely due to gaps in the current interconnection process.  As such, it would be counterintuitive to only apply reforms on a prospective basis.  Where interconnection reforms have been adopted in other regions, transitional clusters and other processes have been implemented to quickly and efficiently shepherd projects already in the queue through the remaining stages of the interconnection process.       

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

NextEra Resources is supportive of the proposed problem statement associated with queue management with the recognition that reform should not be limited to projects on a forward basis.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

While NextEra Resources is not opposed to the CAISO exploring the concepts included in the discussion paper as part of future working groups, there is not enough information for stakeholders to determine conclusively whether the concepts introduced will result in workable solutions.  In the stakeholder meeting CAISO indicated that it was not seeking detailed comment on the concepts nor were the concepts intended to limit additional reforms that could be introduced as it relates to interconnection request intake and queue management.  As such, NextEra Resources recommends that the CAISO evaluate these concepts concurrently with any stakeholder concepts introduced in subsequent working groups. 

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

NextEra Resources supports the principles that the CAISO has identified but maintains that two additional principles should be added to the IPE initiative:

1. Transmission must be valued in a way that aligns with California’s resource objectives as it is a valuable asset available to bring resources online.

It is NextEra Resources' view that the value to generation developers of participating in the interconnection process has been substantially undervalued relative to the demand for CAISO grid access.  This mismatch has resulted in a cost of participating in the queue that is undeniably low, thereby incentivizing developers to test the waters with speculative interconnection requests to determine costs and schedule.  But this low entry barrier comes at the expense of the entire process and has resulted in a Cluster 15 interconnection queue that is seven times larger than demand.  As such, CAISO should increase the financial security that customers must put at risk to enter the queue so they are forced to assess and internalize the viability of their project relative to its costs. This will in turn lead to more meaningful study results sooner in the process, allowing developers to make more informed decisions to stay in the queue or withdraw at an earlier date.

2. The application of interconnection reform should be retrospective.

As previously noted, applying IPE reform to Clusters 14 and 15 (and future interconnection requests) will result in little to no immediate relief to the existing interconnection queue.  While NextEra Resources recognizes that any tariff amendments CAISO makes that emanate from subsequent reforms can only be accepted by FERC with prospective effect, CAISO can apply those tariff revisions to interconnection requests that are already in the queue with a recognition that some projects are mature enough to proceed under the existing rules, less mature projects can use transitional rules, and others can be allotted options to exit the queue altogether. 

It is NextEra Resources’ view that the first principle (recognizing the value of transmission) is the fundamental premise for IPE reform and the following summary outlines the reform proposals that acknowledge the high value of transmission and represent topics that NextEra Resources would like to introduce in subsequent working groups:

1. More stringent requirements for entry into the interconnection queue:

             a. Implement a new, non-refundable entry fee

b. Higher Study Deposits based on project size with limits on refundability

c. More stringent Site Exclusivity requirements by eliminating the ability to pay a fee in lieu of demonstrating exclusivity

2. More stringent requirements later in the process:

a. Higher Deliverability Deposits and more stringent commercial readiness requirements to obtain and retain deliverability

b. More stringent Site Control requirements at the Phase 2 Study milestone for C14 and earlier

3. Automation and standardization of the Phase 1 Study process

4. A one-time, cost-free ability to exit the Cluster 14 queue, and potentially earlier clusters, if new rules are applied

5. A more equitable deliverability allocation process in which there is equal treatment of deliverability allocation between Cluster 13 projects and Cluster 14 projects. The delays in the Cluster 14 process should hold earlier, more advanced projects harmless.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

NextEra Resources is supportive of the CAISO’s proposed scope with the addition of the principles introduced in the previous question.  NextEra Resources is also supportive of the CAISO’s working group schedule but recommends that the CAISO provide more details on how the working groups will be organized/structured, how stakeholder feedback will be memorialized, and when the CAISO anticipates developing a straw proposal.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

Nightpeak thanks the CAISO for the opportunity to comment. Please see other sections for detailed comments.

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

CAISO should assess not only process redesign, but also resourcing, staffing, and technical approaches to address today’s market realities, which requires more interconnection requests to enable competition to drive dramatic grid transformation as quickly and cheaply as possible.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

No comment

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

Concept 1

• Nightpeak supports Concept 1 with the following suggested considerations:
  • Market Participants and power marketers should be included in the list of entities that can issue procurements for EO projects in addition to the CPUC, LSEs, and non-CPUC jurisdictional LSEs
  • Projects requesting to interconnect at POIs which are part of Local Capacity Regions and sub-Regions should be studied on the same timeline as projects with POIs in priority Transmission Plan-designated Transmission Zones
    • As proposed, there are a number of substations which are in LCRs that have a projected future Resource Adequacy need, but which are not included in Transmission Zones identified in the 2022-2023 Transmission Plan
    • POIs that comprise LCRs should be studied on the same timeline as projects with POIs in priority Transmission Plan Transmission Zones to most efficiently address RA shortfalls with new resources and ensure adequate resource adequacy in LCRs
  • Projects requesting Energy Only status should be studied on the same timeline as projects in the highest priority Transmission Zones regardless of their proposed Point of Interconnection
    • Energy Only projects do not need scarce deliverability to be viable and should therefore not be forced to wait to be studied after projects in priority transmission zones with available or planned deliverability
    • Allowing Energy Only projects to be studied on a timeline shared with projects in priority transmission zones is the only way to ensure truly open access to the entire CAISO system
    • Energy Only battery projects have only recently become viable in CAISO given the dramatic decrease in battery costs coupled with the dramatic increase in the severity and predictability of the duck curve. This is evidenced by the gigawatts of energy-only build out in other BAAs with roughly similar dynamics, such as ERCOT. The reason battery projects do not typically request EO through the current GIDAP is because currently there’s a free option for batteries to request and be studied for full capacity deliverability service. If study timelines are likely to be quicker with an EO selection compared to FCDS, more batteries would request EO. EO batteries could also alleviate some of the off-peak deliverability constraints experienced in areas of the CAISO system with high renewables penetration. Past observations about the prevalence of batteries requesting EO should not restrict future flexibility and competition

Concept 2

• Nightpeak opposes Concept 2 for the following reasons:
  • There is no mechanism to allow for open access to the CAISO transmission system for generators who wish to participate directly in the LMP-based energy markets
  • Increases the gap between LSE procurement and project CODs to accommodate the entirety of the interconnection study process, thus increasing the likelihood that price and commercial term renegotiation between generators and offtakers will become more common and unpredictable
  • Provides a strong incentive for all projects to under-bid the true cost of generation to begin the study process, thus decreasing project viability and/or requiring painful and unpredictable price renegotiations as ordinary course of business
  • No way for generators to price in network upgrades or interconnection facility upgrades before pricing offtake agreements to LSEs, again forcing pricing renegotiation
  • Does not reward well-sited mature projects from an environmental or transmission perspective, but rather projects that simply underbid LSE procurement processes
  • If Concept 2 is adopted
    • Market Participants and power marketers should be included in the list of entities that can issue procurements for EO projects in addition to the CPUC, LSEs, and non-CPUC jurisdictional LSEs
    • A project’s financial securities should be fully refunded if an LSE chooses to advance a project to a Phase I study, but not a Phase II study. Otherwise, all projects would simply be price and term takers from offtakers, and would thus become less viable to reach COD or continue development

Concept 3

• Nightpeak opposes Concept 3 for the following reasons:
  • There is no mechanism to allow for open access to the CAISO transmission system for generators who wish to participate directly in the LMP-based energy markets
  • This concept will be the most expensive for ratepayers since any auction clearing price would ultimately be borne by the ratepayers in the form of elevated PPA prices
  • Auction mechanism could result in renewable PPA pricing exceeding the price of market purchases or imports
  • An auction to study projects requesting interconnection would give undue market power to the most highly capitalized developers, thus also increasing overall PPA pricing
  • Does not reward well-sited mature projects from an environmental or transmission perspective, but rather projects which bid the highest to start the interconnection study process

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

No comment

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

No comment

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

NCPA thanks CAISO for the opportunity to comment on this important stakeholder process. CAISO has correctly identified problems with its interconnection queue that require resolution in order to facilitate the resource interconnections necessary for Load-serving entities (LSEs) to serve their customers in this period of rapid change on the electric grid.

NCPA is especially appreciative of CAISO’s recognition that CAISO must do a better job of planning for the interconnection needs of its non-CPUC-jurisdictional LSEs. NCPA and its members are not parties to the CPUC-CEC-CAISO MOU, and the CPUC will not be determining NCPA’s resource portfolios. If access to interconnection capability is to be determined or prioritized by existing capacity and capacity additions approved in the CAISO TPP, there must be a mechanism for such non-jurisdictional LSEs to include their planned resources in the TPP planning process. To the extent that CAISO intends for that discussion to take place in this stakeholder process, NCPA looks forward to participating.

NCPA and its members have historically planned their own resources to meet ratepayer needs, but they require interconnection to the grid for any of those plans to come to fruition. NCPA’s portfolio that includes resources near NCPA members’ load has resulted in predictable and lower overall costs, and consistent ability to serve load. NCPA focuses on generation primarily located in Northern California that supports NCPA member load profiles. NCPA therefore supports the concept of organizing Intake to the Interconnection Queue by prioritizing projects identified in the resource portfolios of LSEs. All CAISO LSEs are working to meet applicable state mandates and to serve their customers in a timely and cost-effective manner. The interconnection process should be centered on meeting those needs.

NCPA does not support use of an auction mechanism to allocate access to grid interconnection. As a load-serving entity that recognizes that load pays the vast majority of CAISO costs, NCPA is focused on reducing costs to its customers. The auction appears to create additional costs that will be passed on to load.

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

NCPA concurs with this problem statement, so long as it is understood that “the state” includes all CAISO LSEs, whether CPUC-jurisdictional or not, and that “state policy and reliability needs” is shorthand for the policy and reliability needs identified by all CAISO LSEs.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

NCPA concurs with this problem statement.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

NCPA strongly supports concept 2 (prioritizing projects requested by LSEs and other offtakers). Centering the interconnection process on LSE needs and their identified portfolios enables LSEs to be assured that their projects will receive sufficient and timely consideration and that they will be able to count on a reasonable timeline for developing projects to meet their customer’s needs. As noted in the response to Question 1, all LSEs, whether or not CPUC-jurisdictional, are striving to meet applicable policy goals and to serve customers in a timely and cost-effective manner. For that, they need to know that projects in their resource portfolios will be studied and interconnected as expeditiously as possible. Thus, it is important for either the TPP to include non-CPUC jurisdictional entities’ TPP zones, or for the Interconnection Process to allow for study in areas needed by non-CPUC jurisdictional entities even if those locations are not in an identified TPP zone (see limitation in Concept 2, section 1.). Additionally, a PPA with identified LSE or other offtaker is a strong indication that a proposed project is economically viable.

With respect to concept 1 (studying only requests in areas where transmission is available or planned), NCPA notes that the viability of such an approach for NCPA would depend entirely on how successful the CAISO is at incorporating the needs of all LSEs in the TPP, including those LSEs whose portfolios are not determined by the CPUC. Failure to identify a means to reflect the needs of non-CPUC-jurisdictional LSEs would also open up such an approach to claims of discrimination. NCPA supports a reasonable level of maturity of development and off taker interest to advance in the interconnection process as described in 2.1 Step 1. But, the scoring criteria would need to allow interconnection locations that support non-CPUC jurisdictional entities and their contracted resources that may not be located in CPUC identified or directed TPP zones.

NCPA does not support an auction process in Step 2 of concept 1 as such a process may result in increased costs to load. NCPA is ready to participate in such discussions, but believes that centering the interconnection process on LSE needs makes the most sense.

NCPA does not support concept 3 of allocating interconnection capacity by auction. NCPA fears that its own projects would lose out to deeper-pocketed bidders (and again, could potentially discriminate against non-CPUC-jurisdictional LSEs and their resource portfolios). NCPA is also concerned that the auction mechanism would increase costs for ratepayers—as the winning projects would include those payments in their costs to ultimate power customers. Moreover, the development of an auction mechanism would use large amounts of CAISO resources—and could make the interconnection process more complicated for CAISO.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

NCPA looks forward to participating in any process (here or elsewhere) where CAISO undertakes improvements in the TPP to incorporate the resource planning needs of non-CPUC-jurisdictional LSEs and ensures that the projects contracted by such LSEs have access to the interconnection process.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

 NCPA has no comments at this time.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

The Alliance for Retail Energy Markets (AReM) is a California non-profit mutual benefit corporation formed by electric service providers (ESPs) that are active in California’s direct access (DA) market.  Customers served by ESPs represent roughly 15 percent of the retail load in CAISO's footprint.  As such, ESPs have a vested interest in the reforms that are being considered in this stakeholder process as it will impact the availability of projects needed to meet future clean energy demands for DA customers.

AReM's comments are limited to its preference amongst the three concepts outlined for managing interconnection request intake.  Of the three concepts presented (qualification process, only study projects requested by LSEs, and auction), AReM prefers the qualification process (Concept 1).  Having a qualification process with a stakeholder developed set of scoring criteria will provide the most robust review and consideration of the most feasible and preferred projects that should move forward in the interconnection process.  While AReM feels that weight should be given to LSE preferred projects, AReM does not believe that this should be the sole criteria by which projects are selected for interconnection study (Concept 2).  Finally, AReM opposes an auction process (Concept 3) as not being compatible with prioritization of projects from analysis performed by CAISO, regulatory agencies, and LSEs.    

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

AReM agrees with this problem statement

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

AReM has no position on this problem statement.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

Of the three concepts presented (qualification process, only study projects requested by LSEs, and auction), AReM prefers the qualification process (Concept 1).  As a group of LSEs that represents a significant portion of the CAISO's load, AReM appreciates that consideration of LSE project preferences is being considered in interconnection queue reform.  However, while AReM believes that this is an important consideration when evaluating projects submitted to the CAISO interconnection queue, AReM does not feel that this should be the only criteria, as proposed in Concept 2.  Often. there are project considerations that LSEs are not privy to when negotiating with counterparties.  Many of these project details, such as availability of transmission at the site, competition with other projects that could impact project interconnection timing, infrastructure requirements, and others, would be better evaluated by CAISO or a third party as part of the qualification process in Concept 1 to assure that projects with the best chance for project success which are aligned with state goals are prioritized.  During this evaluation process, weight should be given to whether a project has a Power Purchase Agreement (PPA) or a Memorandum of Understanding (MOU) with an LSE.  In the early stages of project development, it is rare that a project would have a full PPA.  Giving weight to projects at least at the MOU stage should be incorporated in Concept 1 as an indication of interest amongst parties with customer and compliance obligations.

Moving forward with Concept 2 places too much burden on LSEs to choose projects at early stage of development with imperfect information on the project concept.  In addition, the proposal developed by the CAISO, where LSEs could nominate up to two times their procurement target would be difficult to implement and manage.  Load migration and new market entry of offtakers would create a constantly moving target for LSE needs which may not be able to be accommodated by Concept 2.  Finally, CAISO defines the nomination as being "for that year", but LSE interconnection needs are to meet future procurement targets.  CAISO would need to better define what "year" is the basis for assessing LSE procurement nomination caps.

AReM opposes Concept 3 where developers will be able to prioritize their projects in the interconnection queue via an auction.  As conceptualized by the CAISO, this would appear to give priority to projects who can afford to do so, not necessarily the ones with the highest LSE interest, those that are aligned with transmission availability, or statewide procurement goals.  AReM sees little benefit to advancement of this Concept.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

AReM supports the Concept 1 methodology and does not propose an alternative methodology at this time.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

AReM supports the proposed IPE Track 2 scope.

With regards to schedule, AReM believes that sufficient flexibility should be allowed within the schedule to assure that the final proposal is robust and reflects all stakeholder input.  Given the considerable change that is being proposed in Track 2, CAISO should not be tied to a rigid schedule and should instead extend or modify the schedule as needed when developing the final recommendations to the Board of Governors.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

PG&E appreciates the opportunity to provide these informal comments on the IPE Track 2 discussion paper, which will guide the conversation on the proposed principles and the problem statements at the June 20-21 working group sessions.

PG&E believes the current interconnection process is, for a lack of better words, broken and we agree with CAISO that significant changes to the intake and queue management process are necessary to ensure that Phase 1 and Phase 2 studies produce meaningful and realistic results.  Given the application volume in Cluster 14, the number of Cluster 14 projects that proceeded to Phase 2 studies, and the number of applications / megawatts that applied to Cluster 15, the study results will be meaningless.

Additionally, PG&E recommends that the CAISO prioritizes improvements that will result in effective study results and a process that will allow generators to interconnect in a timely manner to meet our state’s climate goals the grid’s capacity needs.

As it relates to the proposed principles, PG&E offers the following comments and recommendation for an additional principle.

Principle #1. Prioritize interconnection in zones where transmission capacity exists or new transmission has been approved

PG&E recommends the CAISO (1) describe what the method for identifying the zones will be, and (2) define the benefits of a zonal system what the impacts there are of inter-zonal flow interactions.  Transmission/interconnection zones for siting of generation may not align with transmission grid flow under a networked system.  For example, large amounts of generation in one zone with identified capacity upgrades could push the megawatts to another zone where new capacity upgrades previously not required may now be triggered.  How will this possibility be accounted for when prioritizing zones where transmission capacity exists or new capacity will be built? 

Also, the PG&E system is not setup as a zonal model and we recommend the CAISO perform an engineering evaluation of the zonal approach to ensure two or more zones don’t interact push upgrades to a zone that was not identified as having available capacity or expected to have additional capacity.

Principle #2. Limit the amount of studies to reasonable capacity volumes that align with state resource planning

PG&E agrees with this principle.  There is no need to review and study so many projects that are seeking to interconnect a number of MWs that is multiple times more than the CPUC’s integrated resource plan shows are necessary to meet the state’s clean energy goals while ensuring reliability.[1]?  A prime example would be the high-level comments made by CAISO staff about the number of megawatts that applied to interconnect at the Manning Substation (approved in the 2021-22 Transmission Plan) being approximately six times the available capacity that will exist at the substation.

It will also be critical for the CAISO to develop project viability criteria to remove speculative projects from being selected, as they contribute to the creation of super clusters.

Principe #3. Align interconnection and transmission plan deliverability processes and LSE resource procurement functions

PG&E generally supports the concept that the needs of the resource procurement functions within LSEs also must be revisited and evaluated to determine what information is required by LSEs at various stages of their procurement processes and ensure that interconnection study results provide useful information for their procurement decision-making.

      Principle #4. Enhance the post-study queue management procedures.

PG&E also generally supports this principle.  The current tariff and process requirements encourage developers to use the “parking”, “MMA for ISD/COD extensions” and “suspension” option to wait out other resource developers withdrawing from the interconnection process.  PG&E believes this process needs to be modified to remove any option or capability to pause, suspend, or park an interconnection application.  Once the interconnection studies are completed, agreements should be signed promptly and work started on the identified mitigations as soon as possible.

New Principle #5.  Ensure that any proposed enhancements do not create an opportunity for a resource developer or small group of resource developers to gain pricing power (a/k/a market power) for the marketing of projects to load-serving entities.

[1] In addition, the CAISO should account for the public-owned utilities (POUs) within CAISO’s balancing area and their respective resource plans that are submitted and approved by the California Energy Commission.

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

PG&E recommends the following edits in underline/strikethrough to proposed problem statement #1.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs resulted in interconnection studies that are unnecessarily complex due to clusters overlapping with ultimately meaningless results due to the number of projects and MWs that will eventually have to drop out to achieve an implementable number of projects.  The result is that the process takes longer to complete initially, leads to further delays of projects coming online in a timely manner due to the need for restudies, and continues to stack up due to successive super clusters.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

PG&E provides the below edits (in underline) and thoughts on proposed problem statement #2.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current tariff provisions and processes for managing the queue do not facilitate a timely development process, and a large number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

• PG&E agrees that the problem exists but the major problem is that projects sit in the queue without ever moving towards interconnection agreements and implementation, which takes up potential capacity on the grid and provides a financial risk to transmission owners.
• Binding timelines for both 2nd and 3rd financial posting by generation customers should be enforced. The 3^rd financial posting should be required within a set time frame of IA execution and should also serve as the notice to proceed with engineering and construction.  This is key for project implementation teams to receive funding and initiate projects to meet customer in-service dates (ISDs). Levers including termination of GIAs for projects not meeting their construction and financial commitments should be enforced.
• CAISO should reevaluate the concept of Conditionally Assigned Network Upgrades (CANU) and Precursor Network Upgrades (PNU).  Existing methodology increases the dependency on single project to move the network upgrades and queue along. A 100% cost allocation for all dependent projects will ensure that upgrades impacting ISD and Deliverability are built on time without risk of cost shift from Generation customers to the transmission owner.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

Out of the three concepts presented for managing the Interconnection Request intake, PG&E suggests Concepts 1 and 3 be explored further.  PG&E is still evaluating Concept 1 and reserves the right to provide further comments on any concerns in the future.

For Concept 3 (auction process), PG&E believes this proposal has merit and should be explored further since using market forces may help optimize the number of megawatts studied at each location.  Echoing other stakeholder comments from the stakeholder call, PG&E believes that CAISO would need to engage qualified economists to help in setting up such an auction mechanism. It is unclear if an auction process could be evaluated and approved by December 2023.  If not, it may need to be an enhancement with a longer-term horizon that CAISO and stakeholders keep working on.

PG&E as an LSE does not believe Concept 2 supports LSE procurement needs.  When evaluating procurement proposals for resource adequacy, PG&E takes into consideration a project’s expected date for achieving FCDS status and its necessary network upgrades. PG&E as an LSE would not be able to know which projects to request to be studied as it would not have the necessary knowledge to know which projects will meet its needs and are the preferred ones.

Generally, PG&E is supportive of any concept that:

1. Limits the generators to be studied on an annual basis to what is achievable to bring online and is needed by the grid (with a reasonable amount of buffer) within the next 5-7 years taking into account projects already in the queue.
2. Removes speculative projects from the interconnection queue.
3. Ensures all parties are moving as swiftly as possible to interconnect without any pauses or suspensions.
4. Results in an annual initiation of work scope based on executed interconnection agreements.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

CPUC staff appreciate the consideration and ongoing efforts of the ISO to improve the interconnection process through the 2023 Interconnection Process Enhancements (IPE) Track 2 Discussion Paper. We laud the detail and consideration of the ISO’s proposal to tighten the linkages between resource and transmission planning, procurement direction, and the interconnection process.

CPUC staff strongly support the direction of the transformative changes and reforms developed by the ISO and look forward to further development of the proposals in the Working Groups.

CPUC staff also note that FERC’s rulemaking on “Generator Interconnection Procedures and Agreements” (RM22-14-000) may be finalized in the near future, perhaps with the issuance of a Final Rule as soon as this July.  We look forward to engaging with those efforts to help ensure an appropriate linkage between the outcomes of this stakeholder process and that of our federal regulatory counterparts.

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants and must be substantially redesigned to meet state policy and reliability needs.

 CPUC staff support the above problem statement.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

CPUC staff support the problem statement.  

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

CPUC staff support the general concepts presented for Queue Management and look forward to further exploration of them, particularly during the stakeholder engagement and Working Group process. CPUC staff are supportive of ISO efforts to address the existing queue management and supports the proposed solutions being applicable to existing projects in the queue from cluster 14 and earlier. CPUC staff will also continue to work to identify the appropriate role for CPUC in potentially guiding geographically targeted procurement on the transmission system. We note that there will always be a tension between directed procurement for geographically specific needs, with its attendant market power and administrative feasibility challenges, with the need for the CPUC’s 40+ Load Serving Entities to have flexibility to direct procurement towards resources that best serve the needs of their portfolios.  CPUC staff will continue to work together with CAISO staff to identify the appropriate amount of flexibility, in terms of generation attributes, time of need, scope, and geography, before identifying parameters for geographically targeted procurement.

As these concepts are evaluated and refined, CPUC staff will continue to assess the impacts and implications of the concepts on IRP’s development and mapping of portfolios for the CAISO’s transmission planning efforts, and we will work to ensure that under the various proposals the CPUC can continue to provide the appropriate guidance for CAISO’s transmission development and interconnection efforts.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

 CPUC do not have additional proposals at this time but plan to attend working groups.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

No comment.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

Interconnection Customer (IC) agrees with the concerns raised in the proposed problem statements regarding the issues associated with new interconnection requests for clusters 14 and 15, as well as the number of projects in the existing queue that are not progressing to construction or withdrawing. We believe that the current generator interconnection processes are unable to efficiently accommodate all applicants and need to be redesigned to meet state policy and reliability needs.

Regarding the three concepts for managing interconnection request intake presented in the discussion paper, our organization has the following high-level comments:

1. Qualification Process:

While we appreciate the concept's alignment with the open access concept for developers and the opportunity for them to sign VPPAs with commercial offtakers, we have concerns regarding the alignment of IRP and TPP Plan capacities with buildable locations/substations. There may be substations not included in the IRP Plan or lying in TPP zones with planned capacity that have better interconnection prospects. Additionally, we share the concern of other stakeholders regarding the projects that may not immediately qualify but could gain capacity in future TPP/IRP cycles. We support the idea of an easy-to-navigate parking mechanism for projects to re-enter the process when capacity becomes available.

IC urges the ISO to provide a clear demonstration of how the current TPP 22-23 transmission planning zones and capacity map, along with the CPUC provided 22-23 IRP Plan, translate into allowed T-capacity per substation for Cluster 15 projects. Additionally, IC has conducted an estimate of the dropout percentage for Study Areas based on sources shared.  ISO's feedback on the accuracy of these calculations would be greatly appreciated. We suggest that ISO present such statistics during the workshop and share the methodology through which stakeholders like IC can determine whether their projects would advance to the Phase I study or not if concept 1 were to gain majority stakeholder support.

2. Offtaker Selection Process:

While this concept removes ambiguities in contracting projects with offtakers, such as deliverability status, it presents challenges for providing a firm price when interconnection costs are unknown. It may also increase competition and affect pricing in the bidding process, limit developers' ability to build energy-only and merchant projects, and impact net-zero achievement plans for commercial offtakers.

3. Auction Process:

We acknowledge the potential upside of increased PPA prices with this concept, but we express concerns about the lack of clarity on the process and its management. We recommend that the ISO demonstrates a prototype of this concept either independently or in collaboration with a qualified third party to address any further comments effectively. IC requests CAISO share feedback on how an auction process will align with the Open Access methodology for Generation Interconnection.

IC recommends CAISO implement an active plan and visible actions to build trust among stakeholders and expedite results. IC also suggests including the Cluster 15 timeline as part of the Track 2 proposal.

Finally, our organization is providing specific comments on the IPE Track 2 proposed scope and schedule. We request clarification on how the Queue management concepts will impact pre-Cluster 15 projects and recommend a provision allowing LOS at least 2 years in advance of the ISD of the project. Additionally, we recommend including provisions for PTO accountability in cases where delays in ISD and COD dates are triggered by delays in NU coming online from the PTO's end.

In conclusion, our organization supports the need for enhancements to the interconnection process and urges the ISO to consider the recommendations and concerns outlined in our comments for improved efficiency and stakeholder satisfaction.

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

 IC Agrees with this concern.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

IC Agrees with this concern.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

1. Qualification Process: This concept suggests implementing a qualification process to determine which projects will be studied for Full Capacity Delivery Status (FCDS), while providing an alternative study path for all other projects. This process seems the most aligned with open access concept for developers and gives them the ability to sign VPPAs with commercial offtakers. IC shares a few concerns with this concept:

• The IRP and TPP Plan capacities may not fully align with locations/substations that may allow buildable porjects. There are substations that are not in IRP Plan or lie in TPP zones with planned capacity however have better interconnetion prospects with respect to bay positions , short ckt , land availability , permitting risks etc. In addition to this the factors that make Certain substations most attractive for merchant project dvelopment may not get covered through this approach.  
• As a developer it is concerning to see the C15 MWs that entered the Queue have a  potential Dropout MW % of a median of 75% across study areas per the TPP 22-23 Capacity zone map and  CPUC 23-24 TPP 30 MMT High Electrification  Base Portfolio Total Resources (2033) i.e. 75% of the entered MWs will be filtered out if we go by the TPP and IRP Planned MWs only. This estimate is based on IC’s calculations using the information shared in the IPE Proposals,. The calculations are attached with this comment submittal, IC would appreciate CAIOS’s remark on the correctness/accuracy of the approach.
• IC also seconds the concerns with other stakeholders regarding  the ISO’s plan for projects that may not immediately qualify for selection however may get capacity in future TPP/IRP cycles with newer projects. IC supports the idea of an easy to navigate parking mechanism through which projects can re-enter the allocation process easily and quickly when capacity becomes available.

2. Offtaker Selection Process: This concept proposes a process where Load Serving Entities (LSEs) and other offtakers select projects for study as an indication of commercial interest prior to the cluster studies. The one upside to this concept is it removes other ambiguities of contracting projects with off takers, such as the status of deliverability. On the other hand, some  downsides of this concept are :

• It is hard to provide an LSE with a firm price when the costs for interconnection are unknown
• It would make the bidding process into RFPs significantly more competitive, not to mention the optimistic low PPA prices LSE’s would witness before PH 1 Study which would eventually be raised after PH II studies when more clarity on network upgrades and other costs related to the project are realized.
• It would also limit developer’s ability to build energy only projects, merchant projects and build platform level partnerships with commercial offtakes via Virtual PPAs.
• It would impact the net zero achievement plans for commercial off takers.

3. Auction Process: This concept suggests a process that selects projects for study through an auction. The upside to this concept is that it would serve to increase PPA prices since projects would be incentivized to bid as high as possible to get TPD. Off-takers need projects with TPD and will pay a premium for it. ICs could potentially pass through bidding costs to off takers.

The downside is that ICs have no visibility into the process and how CAISO will manage it. This experiment could add more burden & delays to the interconnection process instead of fixing the problem. IC is also concerned with how this concept will support the Open access paradigm for Generator Interconnections.

For any further comments on this concept, it is best ISO expeditiously demonstrates a proof of this concept either independently or in collaboration with a qualified third party.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

With regards to concept 1 of the ‘managing interconnection request’ section of the paper, IC would like ISO to demonstrated clearly how does the current TPP 22-23 provided transmission planning zones and capacity map and the CPUC Provided 22-23 IRP Plan converts into allowed interconnection-capacity per substation for C15 projects.

IC calculated the estimated dropout % for Study Areas based on the two sources mentioned in the paragraph above and is sharing those calculation for ISO’s review, IC Would appreciate if ISO can comment on the correctness of these calculations.  It will be important  for CAISO to demonstrate in the IPE work shop how the dropout estimate is calculated. IC recommends CAISO share the methodology by which Stakeholders may be able to identify whether their projects will make it through to the PH I study were concept 1 be selected and approved.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

Couple of comments on concepts for managing the Queue:

• Clarify which sections of Queue management concept will impact Pre C15 projects (C10,11,12,13,14 tec.) in the workshop or future papers.
• Concept 1: Modification Process Updates

A demonstration or presentation in the upcoming workshop on how this will change the MMA process, timeline and limits projects from requesting modification will be very helpful.

• Concept 2: Limited Operation Study Process Adjustments

IC requests a provision to allow LOS at least 2 years in advance of ISD of the project

• Concept 3: Project Accountability

IC recommends ISO to include provision for PTO accountability in this section especially if the delays in ISD and COD dates are triggered by delays in NU coming online due to various reasons from PTOs end.

• Concept 4: Clearing the Queue (One-Time Withdrawal Opportunity)

Clarify which sections of Queue management concept will impact Pre C15 projects (C10,11,12,13,14 tec.) in the workshop or future papers.

• There seems to be a consensus amongst stakeholders that the ISO and the PTOs need to increase their workforce or outsource the work to Third parties that may be able to help manage queue better. An active plan and action on this visible to the stakeholder would help build trust amongst all parties and hopefully show faster results than other concepts stated in the paper. 

• IC would like ISO to include the Cluster 15 timeline as part of the Track 2 proposal.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

REV supports CAISO’s work to improve the interconnection process, as the current process is creating significant delays in getting new projects online. REV appreciates CAISO developing the proposed foundational principles for interconnection reforms and the problem statements as helpful ways to frame the issues and ground discussions moving forward. REV agrees the two problem areas identified (high number of interconnection requests and managing the queue) are significant issues and should be considered for improvement. However, on the principles, REV suggests CAISO be open to changes on them moving forward as some appear to presume certain solutions (e.g. limit studies to reasonable volumes) when further discussion may reveal other options or may be in conflict with other principles (e.g. continue to ensure open access).

REV also suggests CAISO look at other areas of the interconnection process and not just and developer-focused changes. For example, delayed or long-lead time network upgrades required to be completed by the participating transmission owner (PTO) is a significant factor in whether a project proceeds in a timely manner, is held in the queue, or drops out. While this may not be in CAISO’s direct authority, it is an issue that CAISO should prioritize with the CPUC and PTOs for improvement. For example, are there incentives for PTOs that should be considered to complete projects faster? Or penalties for not completing projects on schedule?  

REV also suggests that CAISO consider changes proposed in the FERC NOPR on interconnection. While REV understands CAISO’s need to move forward while the FERC process is delayed, if the ruling does come out in the early stages of IPE Track 2 then those changes should be considered. This may include, for example, higher fees to enter the queue and more stringent requirements to move through the process.   

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

REV agrees with the problem statement on interconnection request intake, but suggest it cover a broader range of issues. For example, the problem statement should also consider challenges posed by the dynamic nature of resource portfolios, the frequent changes in Transmission Plan Deliverability (TPD) rules (e.g., creation of new groups), and the lack of transparency about where available transmission capacity exists. These uncertainties create a resource development lag and result in a large number of interconnection requests. 

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

REV agrees with this problem statement on managing outstanding interconnection requests. However, as noted for the previous question, this problem area should also consider using a more coordinated resource development and interconnection process, which can reduce commercial uncertainty and therefore improve queue management. REV agrees that CAISO proposals such as one time withdrawal with no penalty could help flush out some of the projects that are not viable. In addition, REV supports CAISO’s proposal on updating studies such as Limited Operation Study (LOS).  

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

REV is interested in discussing these concepts in future workshops, and requests more clarity on the timeliness and usefulness of some of the key inputs such as the transmission capability estimate that CAISO is planning to publish in June 2023. For instance, assuming cluster 15 was not delayed and CAISO’s queue opened in April 2024 for cluster 16, the June 2023 Transmission capability estimate could become obsolete by the time cluster 16 queue window opened. CAISO might have already considered this scenario but items like this should be discussed further.

For Concept 1 on qualification for determining projects for FCDS, REV does not agree with limiting interconnection to specific zones, especially if those zones are strict areas and anything outside of it is deprioritized. While REV understands the desire to have developers focus on zones with available or planned capacity, there may be other reasons a developer chooses a project location. The interconnection process should allow projects that customers deem feasible to submit an interconnection request and receive equal study treatment. Also, CAISO should be cautious in limiting requests in zones, since it presupposes a certain success rate for projects, which is unknown. Additionally, Concept 1 currently has many options, tracks, and if/then requirements. REV suggests a flow chart would help stakeholders better understand all of the contingencies proposed.

REV opposes Concept 2 to only study projects requested by LSEs and other offtakers. This concept is unlikely to be feasible unless as it would result in more risk and burden on LSEs and developers to conduct procurement processes for projects that turn out to not be viable and/or exceed cost caps. This proposal also places more market power with offtakers at an inappropriate point in the process where developers are still working on project risks and uncertainties (most notably whether the project would have deliverability), putting offtakers in a position of determining which projects move forward with limited information. This could also create an unfair advantage for LSEs that may want to develop and own projects themselves to favor their projects given they know more of the risk and viability.

For Concepts 1 and 2, CAISO should ensure coordination with CPUC to direct procurement further out than normal if commercial interest remains a key item to receiving and retaining deliverability. Many cluster 15 projects would likely have a delivery year of 2030 or later, whereas currently the vast majority of solicitations are only through 2028 due to the recent CPUC order. This alignment of commercial interest will be important for projects to remain viable during the TPD process.

REV does not have any comments for Concept 3 at this time.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

 REV has no further comments on the schedule or scope at this time.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

SDG&E appreciates CAISO’s proposal and sees it as a positive step towards solving issues surrounding generation interconnections. SDG&E definitely agrees with CAISO and other stakeholders that the current processes and study methodologies must be fundamentally reformed, because they are currently untenable at the current volume levels of interconnection requests.  This, of course, assumes that the current strong demand for interconnection will continue in California (even if it recedes somewhat from the recent record levels), a view that SDG&E shares with many of the stakeholders. In many areas where options were given, SDG&E found that while some options may be  more effective than others, we believe that all options  generally would improve  the current process.  

In addition to the proposals from CAISO, SDG&E looks forward to discussing its comprehensive interconnection proposal which SDG&E feels is flexible enough to accommodate feedback from all stakeholders while featuring procedures that may have wide support among the stakeholder base. 

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

SDG&E agrees with this problem statement. It should be emphasized that even if the industry’s “critical planning and engineering resources” were to be expanded, this would only represent a partial solution. The issue of accuracy of interconnection studies being degraded/skewed due to unrealistically large amounts of generation would remain unsolved. This excessive amount of generation may mask certain reliability issues and falsely identify other upgrades/mitigation as required. Only through managing the amount of MW allowed to enter the queue, as the CAISO has identified in these problem statements, can these issues truly be solved. 

SDG&E notes that practically rationing the queue is a fundamental change in the interconnection process in California, and represents a dramatic departure from Open Access. Such a change will likely face a high hurdle to overcome as far as opposition. However, SDG&E urges CAISO to stay resolute due to the infeasibility of the current interconnection process.    

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

SDG&E agrees with this problem statement as just reducing the amount of projects coming in the front-end of the process does nothing to address how many progress through to execution of a GIA and further progressing to commercial operation. SDG&E observes large numbers of generators that ultimately do not make it to commercial operation for varying reasons. This issue can be illustrated by comparing the amount of generation in the queue to possible indicators of energy need (load, deliverability, etc). In most cases, the amount of generation in queue will far exceed any indicators of need. SDG&E hopes that CAISO will consider some tangible actions to address the less viable projects that are languishing in the queue. There are a few good proposals in this regard between some of CAISO’s proposed concepts and SDG&E’s IPE proposal. 

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

SDG&E sees any of the three concepts as an improvement over current processes and thus would welcome further discussion and development of any/all of the three. At this stage of the IPE, prior to the working group meetings, SDG&E is keeping an open mind as to which of the three it prefers over the others.  Although SDG&E believes that each of the three options would provide benefits (pending details yet to be formulated), SDG&E views the option that has the highest potential to reduce a bloated queue and resultant low-quality studies is the auction proposal. However, this is also the option that CAISO has provided the least amount of very important details, making it the least developed at this stage of the IPE.  An auction mechanism would undoubtedly require the most development effort and diligence from all stakeholders to achieve a workable solution.   Participants brought this up during the 6/7 IPE call. Because of the amount of time/work that may be needed to develop the auction proposal, SDG&E is unsure if the benefits would outweigh the effort. 

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

SDG&E would like to present a proposal that is compatible with many aspects of what CAISO has presented thus far. It makes the study process more efficient/streamlined while ensuring CVC earlier in the process. The high-level summary is included below.  

Key Elements of Reformed Interconnection Process: 

1. IR Data Validation/Scoping Phase – IR data package to follow a standard parameterized process to simplify and streamline the IR data validation process.  The Scoping Phase will be expanded to provide high level scope/cost information (PTO IF and IRNU) upfront utilizing results from the prior interconnection studies and require the ICs to post IFS and demonstrate Commercial Viability to proceed to the Phase I Study. 

2. Phase I Study – This process will continue to rely on the standard parameterized IR data, results from previous interconnection studies, and standardized SCD data and perform simplified Power Flow Study based on the remaining queue to provide updated scope/cost information (PTO IF, IRNU, GRNU, and DNU) and Milestone Dates.  There will be increasing Commercial Viability requirements to enter Phase II with increasing financial penalty for project withdrawal. 

3. Phase II Study – This process will be somewhat similar to the Phase I Study with the addition of Maximum Cost Responsibility/Exposure and refinement of the scope/costs (PTO IF, IRNU, GRNU, and DNU) and Milestone Dates based on project withdrawals/modifications and even greater Commercial Viability requirements and higher penalties for project withdrawals. 

4. Post Phase II Study – Annual Operational Study will be performed incorporating SCD, Power Flow, Transient Stability, Post-Transient Voltage, to provide refined scope/cost estimates and Milestone Dates to be incorporated into the S/LGIAs based on the remaining queue. 

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

No comments

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

SB Energy Comments: SB Energy appreciates the opportunity to comment on CAISO's 2023 Interconnection Process Enhancements Track 2 to address the ongoing challenges of managing the interconnection requests to ensure that projects can achieve CODs and meet state policy and reliability needs

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

SB Energy Comments: SB Energy agrees that the recent delays in study and process timelines have resulted in delayed completion of studies, execution of agreements and subsequently delayed timelines to achievable CODs for projects. The problem statement needs to be reflective of the resultant delayed CODs, construction timelines and high costs that are becoming impediments to achieving commercial viability sooner. At the same time the problem statement should reflect the intended principles and outcomes of the stakeholder process that promote competition while supporting CAISO's commitment to open access principles.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

SB Energy Comments: SB Energy agrees that the current rules have become an impediment for projects that are ready to construct to achieve earlier CODs because of projects in the interconnection queue that do not proceed or intend to proceed to commercial operations. A visible example of the impact of the uncertainty of the intent of such projects is the delays in analysis being performed by affected systems for projects as affected systems are unsure of the future of projects in earlier queues. At the same time projects should not be penalized for factors that might be out of their control. Additionally, the availability of sufficient transmission planning deliverability is also a major impediment in projects in achieving commercial operations and the reform of the deliverability assessment methodology is vital in ensuring that more projects are able to achieve commercial operations to allow CAISO to meet state policy and reliability needs.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

SB Energy Comments:

Regarding Concept 1: Qualification process for determining projects studied for Full Capacity Deliverability Status (FCDS) and study path for all others: This could be a viable approach that allows projects that are ready to construct and come online sooner to achieve commercial viability sooner, but CAISO would need to ensure that a proper framework for criteria is established so that projects that intend to move forward to achieve these outcomes.

Regarding Concept 2:  Only study projects requested by LSEs and other offtakers: This proposal is against the principle of Open Access and should not be pursued. 

Regarding Concept 3: Only study projects that are successful in an auction process for proposed projects: CAISO should present the framework of this auction to allow stakeholders to weigh in further.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

SB Energy Comments: No comments at this time.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

SB Energy Comments: The scope needs to include efficiencies of scale that can be achieved by more data transparency and tools for the benefit of developers. Providing more information and tools that allow developers to estimate the following for various POIs would assist in managing queue intake:

a. Estimated Available Capacity.

b. Probability of the chances to achieve FCDS or PCDS at a particular location.

c. Estimates of the expected Interconnection Facilities costs and Network Upgrade costs.

d. Estimates of the achievable COD.

This should be an item of discussion in the upcoming working group meetings.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

SEIA does not necessarily agree that the high volume of interconnection requests received in Cluster 14 and Cluster 15 and the subsequent delays to those cluster studies suggests the need for interconnection process reform. As we have stated in the FERC Interconnection Rulemaking proceeding, there is an inherent difference between the new projects coming online and the projects of the past. There are more requests because newer projects are smaller and have less capacity. More interconnection requests are needed to integrate the same amount of generation capacity into the grid, which is a trend that is anticipated to continue and likely increase. However, it is the delays to the cluster studies that suggest that interconnection reforms are necessary to ensure that the interconnection process can keep up with the changing resource mix and meet state policy and reliability needs.

That said, this stakeholder process should focus on maintaining a delicate balance of interests. The process should identify more viable projects earlier in the process and discourage developers from submitting interconnection requests that are not as far along in the development process. However, the reforms must also be consistent with the open access principles articulated in FERC Order 2003 which requires standard interconnection procedures to “(1) limit opportunities for Transmission Providers to favor their own generation, (2) facilitate market entry for generation competitors by reducing interconnection costs and time, and (3) encourage needed investment in generator and transmission infrastructure.”[1] Using these principles as guideposts in the IPE working groups will ensure outcomes that promote competition while supporting CAISO’s goals of incentivizing interconnections in zones with existing or planned transmission capacity and discouraging speculative interconnection requests. This can be achieved efficiently and equitably through reforms like increased readiness requirements, higher security deposits, increased data transparency earlier in the interconnection process, and more reasonable network upgrade costs achieved through cost allocation reforms.

[1] FERC Order 2003 at 4.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

SEIA agrees that the current rules do not adequately incentivize projects to proceed to commercial operations or withdraw, resulting in an extensive queue that potentially impacts development for other projects, namely with respect to deliverability allocations. SEIA believes it is important that the problem statement recognize that there are delays to commercial timelines outside of developers’ control, such as supply chain delays and delays in building necessary network upgrades. Developers should not be penalized or held responsible for such delays. SEIA provides the following comments on the items in Section 5 of the discussion paper.

Item 1: Modification Process Updates

Material Modification Assessments (MMA) provide developers flexibility to alter projects to be more commercially viable which ultimately increases efficiencies in the interconnection process. MMAs allow developers to update their planned facilities to include the most up-to-date technologies. SEIA is open to considering more stringent MMA criteria that discourages the exploitation of the MMA process by projects that are not progressing through to construction. It is important that changes considered do not limit the flexibility afforded by the MMA and do not inhibit important modifications to technology, such as inverter technology changes as changes are made to keep up with IEEE standards. Further, any changes to the MMA criteria must make explicit that adding BESS is permitted. The addition of storage results in better electrical performance. It increases reliability. It improves frequency response. There is no reason to deem such a change to be a material modification, especially when it is in the grid’s best interest to add more storage. To the extent that CAISO requires specific types of control technologies to add an additional resource, they should make this transparent. CAISO can also make public a pre-approved (and constantly updated) list of equipment changes that do not constitute an MMA and create an automated process for developers to update their projects when such changes occur.

Item 2: Limited Operation Study Process Adjustments

No comments at this time.

Item 3: Project Accountability

SEIA supports increased accountability standards to prevent projects from “camping” in the queue but stresses the importance that these heightened requirements do not penalize projects delayed by factors like extended transmission upgrade timelines. SEIA believes that stringent site control requirements enforced throughout the development life cycle could improve project viability and ensure that speculative projects are unable to “camp.”

Remove Suspension Rights

SEIA strongly opposes the removal of suspension rights. Suspension rights provide important protection for developers against the types of delays discussed previously, and removing these rights would violate FERC Order 2003, which explicitly provided for suspension rights to allow interconnection customers “the flexibility necessary to accommodate permitting and other delays that are particularly likely to affect large projects.” See Order No. 2003, 104 FERC ¶ 61,103, P 410.

TPD Transfer Limitations and Requirements

The IPE working groups should consider enhancements to the TPD transfer process that would incentivize the transfer of TPD from projects with TPD allocations that are not advancing through the queue to projects that are ready to proceed. Forcing a project to withdraw after transferring TPD might discourage these transfers.

Interconnection Requirements for an Asynchronous Generating Facility

No comments at this time.

Item 4: Clearing the Queue (One-Time Withdrawal Opportunity)

SEIA supports the “clearing the queue” concept but agrees that the details of the withdrawal opportunity are important to not harm later-queued projects or cause cascading withdrawals. Tying the size of the withdrawal refund to the impact on subsequent projects could provide the proper incentive so that “slam-dunk” withdrawals exit the queue while the more impactful projects remain and become subject to the more stringent project accountability criteria described above.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

Concept 1: Qualification process for determining projects studied for Full Capacity Deliverability Status (FCDS) and study path for all others

SEIA believes this could be a workable framework, though the implementation details and “maturity” criteria will need to be considered. If CAISO does proceed with a two-track construct, CAISO should rely on stricter readiness criteria, such as stricter site control and additional permitting evidence, in evaluating the Track 1 projects rather than an administratively determined limit on the amount of capacity studied. The market factors that affect project development and attrition are dynamic and difficult to predict let alone anticipate the potential impact on projects. Capping studied capacity at a multiple of the planned transmission capacity in a zone, for example, could result in an under procurement that leaves the transmission system underutilized. CAISO should instead employ tools like stricter readiness criteria that incentivize well developed projects to interconnect, reducing the risk of attrition and/or underutilization of available deliverability. Stricter readiness requirements coupled with higher security deposits, potentially with more at-risk earlier in the interconnection process, will naturally winnow out less viable or competitive projects without relying on administratively determined limitations. Further, SEIA supports AES Clean Energy’s recommendation that the CAISO should allow low priority projects an opportunity to provide a third-party study to rebut the determination and be reconsidered as a high-priority projects.

Under a two-track framework, SEIA suggests alternative DNU cost allocation principles be considered. More specifically, SEIA opposes the proposal to reimburse Track 2 interconnection customer DNUs with CRRs. CRRs are severely underfunded and do not provide developers any certainty that their DNU costs will be recovered; the risk associated with CRRs do not align with the benefits provided to the system by projects developed outside of the TPP zones. Outside of cash reimbursement, CAISO should consider a cost allocation mechanism that reflects the pro rata share of the DNU and that gives the project an opportunity to recover those costs from subsequent projects utilizing that upgrade.

Concept 2: Only study projects requested by LSEs and other offtakers

SEIA strongly opposes this concept and asserts that it violates the open access principles established in Order 2003, as it would incentivize LSEs to select its own, or favored, generation. With the high potential for anticompetitive outcomes, this proposal risks significant challenges at the federal level. Does not consider corporate offtakers.

Concept 3: Only study projects that are successful in an auction process for proposed projects

SEIA believes this is an interesting concept that is worth discussing further in the stakeholder workshops. As is the case with all of these proposals, the justness and reasonableness of this proposal will depend on the implementation details and access to transparent information that would allow developers to replicate cluster or deliverability standards.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

While SEIA appreciates the need to quickly address interconnection reforms, we are concerned that three working group sessions may not be sufficient to vet all proposals and revise them as needed. We have seen first-hand the need for an in-depth stakeholder engagement during the PJM interconnection reform process. The process took place over the course of a full year, with many stakeholder meetings and negotiations, but the result was a widely supported reform that received FERC approval. SEIA requests that the CAISO schedule additional working groups to address its interconnection reform.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

The Six Cities support the CAISO’s efforts to advance substantial changes to its interconnection policies to meet state policy goals requiring increased amounts of renewable generation while addressing the unprecedented level of resource development activity that has been observed in the CAISO interconnection queue in recent years.  The Six Cities agree that these are critical issues and look forward to active engagement in this stakeholder process.  From their perspective as California load-serving entities, it is crucial that the CAISO take necessary steps to enable expeditious interconnection of new resources that are eligible to provide resource adequacy (“RA”) capacity.  Procurement of capacity has become increasingly challengingly due to an array of structural concerns, not the least of which is the time and uncertainty associated with the interconnection and transmission planning deliverability allocation processes.  Put simply, more RA-eligible capacity resources are needed, and they are needed quickly.  This initiative should therefore be among the CAISO’s highest priorities for this year.  The Six Cities appreciate the CAISO’s initiation of this stakeholder process and the stakeholder process in the Generation Deliverability Methodology Review initiative. 

Given the timing of the CAISO’s issuance of its Discussion Paper, initial stakeholder meeting, and subsequent comment deadline, all of which occurred in a compressed period of two weeks, the Six Cities note the CAISO’s acknowledgement that, at this earlier stage of the initiative, it may not be feasible for stakeholders to substantively comment on the detailed concepts the CAISO has floated for stakeholder consideration in the working groups.  Given the importance of this initiative, the Six Cities agree with the CAISO that keeping this process moving forward on a timely cadence is appropriate.  At the same time, the innovative nature of several of the CAISO’s ideas merit thoughtful and thorough evaluation through the stakeholder process.  Moving forward, it will be important to allow stakeholders adequate time to meaningfully comment on the CAISO’s proposals.

In general, the Six Cities are in agreement regarding the overall scope and direction for this initiative, with the recognition that the issues slated for consideration may and should evolve in response to stakeholder feedback from the working groups.  One issue of importance to the Cities, which has not been addressed in adequate detail in the discussion paper, is how the CAISO intends to integrate the policy choices regarding resource procurement by load serving entities, such as the Six Cities, that are not subject to the jurisdiction of the California Public Utilities Commission (“CPUC”).  In at least one respect, the CAISO’s conceptual proposals appear to presume that the CPUC’s resource planning and procurement should dictate elements of the interconnection process, such as through the designation of “zones” for resource development conforming to CPUC procurement determinations.  (See, e.g., Discussion Paper at 8.)  The Six Cities strongly agree with the CAISO’s statement in the Discussion Paper that

The ISO also understands the need to ensure consistent treatment of all LSEs and offtakers, CPUC-jurisdictional and non-jurisdictional, within the ISO footprint on matters of generator interconnection and transmission planning, and seeks to ensure opportunities for non-CPUC jurisdictional entities to have their project needs considered in the TPP.

(See Discussion Paper at 7.)  As this initiative moves forward, the Six Cities request that the CAISO provide visibility into what steps the CAISO proposes to take to ensure that the procurement decisions made by non-CPUC jurisdictional load serving entities are factored into the CAISO’s interconnection policies and how its policy proposals in this initiative enable (and do not restrict) such LSEs in undertaking resource planning and procurement as determined by their local regulatory authorities.  At an appropriate point in this initiative, it may be useful for the CAISO to convene a working group meeting specifically focused on the needs of non-CPUC jurisdictional load serving entities in connection with the interconnection process. 

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

 The Six Cities concur in this problem statement.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

 The Six Cities concur in this problem statement. 

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

The Six Cities believe that the three proposed “Concepts” merit further consideration through the working group process that the CAISO has identified for this initiative, but the Six Cities take no position at this time on which, if any, of these Concepts should be adopted, pending further discussions among stakeholders.  The Six Cities look forward to engaging with the CAISO and stakeholders through the working group process.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

At this time, the Six Cities do not intend to present proposals at the working group meetings. 

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

At this preliminary stage of the stakeholder process, the Six Cities have no immediate concerns with the scope and schedule that the CAISO has identified, noting that the discussion paper includes a schedule for the initial three working group meetings and, presumably, next steps following those meetings will be determined as part of the working group process.  Given the complexity and the scope of the topics assigned to this initiative, the Six Cities support the CAISO advancing this initiative promptly, but also taking the time to thoroughly vet proposals with stakeholders and obtain stakeholder input through working groups. 

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

Southern California Edison (SCE) provides the following high-level comments on the 2023 IPE Track 2 Discussion Paper, consistent with CAISO’s clarification during the June 7 stakeholder call that it is not currently seeking specific comments on the details of the proposed reforms.  SCE understands that CAISO solicits these informal comments in order to guide discussion at the upcoming June 20-21 scheduled working group session to refine principles and the problem statements addressed below.  SCE reserves the right to provide more robust comments in the planned working group sessions scheduled for June 20, 21, 27, and July 11 as well as any subsequent Issue/Straw Proposal, Draft Final Proposal, and/or Final Proposal the CAISO may publish in the future.

SCE applauds the CAISO initiating, with the issuance of the 2023 IPE Track 2 Discussion Paper, this initiative to probe concepts for significant and transformative improvements to the CAISO’s interconnection process and its interconnectivity to resource planning, transmission planning, and power procurement.  The exceedingly high volume of interconnection requests submitted for Queue Cluster (QC) 14 and QC 15 have caused the existing interconnection process to become largely obsolete and no longer sustainable.  SCE agrees the revisions required for the interconnection process must be transformative, and not incremental as has been undertaken in previous interconnection process enhancements initiatives.  The interconnection process must be substantially redesigned to meet reliability needs as well as California’s carbon reduction and clean energy goals in an efficient and cost-effective manner by 2045.  SCE looks forward to collaborating with all stakeholders to ensure the transformative changes envisioned in 2023 IPE Track 2 come to fruition.

SCE also supports the CAISO’s consideration of ideas for managing the volume of resources already in the CAISO’s interconnection queue from earlier interconnection application windows.  While fundamental changes to the interconnection process are being considered for QC 15 and beyond, SCE remains concerned with the TP Deliverability (“TPD”) allocation for QC 14 and prior clusters.  Specifically, due to the high volume of active interconnection customer projects (“projects”) that remain in QC 14 and prior clusters waiting for an allocation of deliverability, the current short to mid-term additional deliverability included in the latest TPP may be allocated to projects that do not meet the commercial readiness requirements being contemplated for QC 15 and beyond.  In essence, and with respect to the potentially allocated deliverability to projects with low viability or limited intentions to start engineering, design, procurement, and construction of a new generating facility, SCE recommends applying the appropriate enhancements resulting from this IPE effort to the QC 15 and beyond allocation of deliverability and implement proposals to manage the volume of resources in the existing queue.

SCE is concerned about continuing to rely upon the use of PPAs to determine priority in the TPD allocation process. Using executed PPAs to give projects highest priority could encourage some LSEs to sign contracts that lack commercial certainty from a cost and timing perspective, hence potentially creating a perverse incentive for certain offtakers to execute less reliable contracts for the sole purposes of obtaining deliverability. Such a TPD allocation process also places the IOUs at a contracting disadvantage relative to non-IOU LSEs who are not subject to CPUC oversight of their contracting activities and do not receive this additional scrutiny.

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

SCE generally agrees with the primary problem statement - “The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants and must be substantially redesigned to meet state policy and reliability needs.” 

As QC 14 has demonstrated, and given the large magnitude of interconnection requests, the existing generator interconnection process to study all interconnection requests is no longer sustainable due to both the demand on critical planning/engineering resources and usefulness of the study results. SCE would propose that CAISO consider this latter issue in their problem statement as studying an extraordinary number of MW results in the requirement of extraordinary network upgrades and associated costs and durations that will likely not ultimately be needed due to the historic 80%-85% rate of projects that have eventually withdrawn from the queue. With the exponential surge in interconnection requests in QC 14 and QC 15, the interconnection request intake process is in serious need of revamping from an efficiency standpoint to limit studies to those projects that seek to interconnect in priority zones identified in the CAISO’s 2022-2023 TPP where there is an expectation of available deliverability. This new approach should help produce meaningful and actionable study results to bring online the needed resources to meet the state’s clean energy goals.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

SCE generally agrees with the secondary problem statement – “Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.”  The CAISO should adopt more stringent requirements pre- and post-GIA or UFA to ensure active projects in the interconnection queue (“queue”) either proceed towards commercial operation, withdraw from the queue, or have these projects’ GIA or UFA terminated. Projects that have been allowed to linger in the queue pre- and post-GIA or UFA (as a result of lax adherence to the provisions in Appendix DD to the CAISO Tariff, such as “parking” without requiring the 2^nd IFS posting or the ability of submitting multiple COD extensions, which defer project milestones or exercising the suspension provision) without demonstrating substantive progress towards commercial operation can cause impacts and prevent commercially viable projects from moving forward. The CAISO can also partially address the impacts of non-viable projects in the queue by more strictly enforcing its existing tariff to remove them if they have exceeded the typical seven-year period permitted by the tariff.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

Concept 1. A qualification process for determining projects studied for Full Capacity Deliverability Status (FCDS) and an alternative path for all others.

SCE is further exploring the option to study only those projects that are seeking to interconnect in a priority zone and have met a predefined set of commercial viability criteria. SCE also recommends the existing commercial viability criteria for allocating TPD be revisited. Although Option 1 under Concept One may have some appeal since most, if not all, projects studied with the corresponding capacity equal to the available capacity in a priority zone would receive deliverability upon completion of the Phase 2 study (i.e., 3-4 months earlier than the current process), SCE is concerned this option may inappropriately limit project competition and result in capacity shortfall due to project failure.  Thus, SCE’s preferred interest is further exploration of Option 2 under Concept One that contemplates a larger amount of project capacity for study that would likely receive deliverability.  From a resource procurement standpoint, the increased breadth and diversity of projects available to LSEs and other offtakers under such an approach would be a preferred outcome.    

Concept 2.  A process where Load Serving Entities (LSEs) and other offtakers select projects for study as an indication of commercial interest in advance of the cluster studies.

SCE does not support a process where LSEs and other offtakers would nominate projects to be studied.  A significant timing disconnect issue exists with this proposal. Under the current procurement process LSEs start evaluating projects at a point years/months after an interconnection request (“IR”) is submitted.  From a procurement perspective, knowing a counterparty has requested Full Capacity Deliverability Status (FCDS) and that they are further along in the signing of their LGIA is a determining factor for SCE in shortlisting and prioritizing a project.  In large part, because of the additional certainty around the price in the PPA and the expected on-line date of the resource. At the time an interconnection customer (“IC”) submits its IR, LSEs would not yet be aware of these projects or not have all the information needed to make a sound decision on project selection.  The selection process by LSEs should be conducted after the completion of the interconnection studies, which consider commercial viability criteria that needs to be further developed and refined.  SCE also does not believe it would be appropriate for it to participate in the process to select the projects for nomination to be studied and make that determination prior to entering the queue.  As stated above, SCE looks forward to participating in the working groups to identify commercial readiness criteria outside of having an executed power purchase agreement (“PPA”), which may not be a valid benchmark of commercial readiness.

Concept 3.  A process that selects the projects for study through an auction.

SCE currently does not support the implementation of an auction mechanism to select projects for study and would only potentially consider supporting an auction mechanism after learning more about the details and mechanics of such a paradigm. SCE is concerned a narrowing of the interconnection study intake process predicated upon an auction model may not necessarily result in the most commercial-ready projects both being studied and moving forward in the interconnection process. This option may simply result in developers with the “deepest pockets” being studied.  SCE is also concerned with the possibility of creating a secondary market where an entity is a successful bidder to be studied that subsequently sells that “right” to another party or, even worse, retains the right for an indefinite period of time, waiting to extract a high profit from yet another entity.  

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

SCE currently does not have a proposed alternative methodology in alignment with the fundamental principles, but believes the stated concepts are in need of further development, including issues such as deliverability reform and/or study reform, among other items not yet known at this point.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

SCE supports the IPE Track 2 proposed scope and schedule to apply any resulting FERC-approved tariff revisions to QC 15, which is now scheduled to restart in April 2024.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

The AES Corporation (“AES”) is a Fortune 500 global energy company accelerating the future of energy.  Together with our many stakeholders, we’re improving lives, and our planet, by delivering greener, smarter energy solutions to businesses and organizations, cities and nations, and whole industries.  AES is an industry leader in developing and operating the solutions that will enable the transition to zero and low-carbon sources of energy.  AES is uniquely positioned as a clean energy developer and owner, transmission-owning utility, and innovation incubator to identify insights to the systems level challenges and opportunities in our electrical grid, including those related to transmission interconnection.  AES New Energy Technologies serves as the innovation center for AES, collaborating with our businesses, stakeholders, and partners to scale solutions that accelerate the future of energy.

AES New Energy Technologies appreciates the opportunity to provide feedback to the CAISO on the IPE Track 2 Discussion Paper.  We understand that brief, focused feedback has been requested due to the short turnaround for these comments and their intended use to guide further conversation on the specific Problem Statements and Principles included in the Discussion Paper.  AES New Energy Technologies would appreciate the opportunity to further engage in feedback sessions during which we can provide fuller comments in a collaborative setting.

AES New Energy Technologies provides the following executive summary of our comments.  The overburdened interconnection process is one of the greatest barriers to achieving the state’s decarbonization goals.  Interconnection costs and study delays have resulted in outsized uncertainty for renewable generation projects fulfilling consumer demand.  The CAISO’s proposed Problem Statements, shed light on, but do not fully address the scope of the interconnection process issues.  The Problem Statements must be refined to better reflect the root causes of increased interconnection applications and the ability of projects to move efficiently through the queue.  

Primary root causes of increased interconnection applications:

1. The increased demand for renewable resources, driven by state policy, federal legislation, and consumer desires.
2. Participant uncertainty regarding receiving a point of interconnection that is deliverable and affordable to their project.
3. Participant uncertainty regarding the time for determination of item (2).

Primary root causes of projects not efficiently moving through the queue to commercial operations:

1. Limited transmission capacity available to deliver project generation.
2. Participant uncertainty regarding the time to receive interconnection approval timing and final cost.
3. Participant uncertainty regarding the final build of associated transmission facilities.

With the problems facing the current interconnection process better defined, AES New Energy Technologies offers a few initial edits to the following foundational principles for interconnection process reform:

1. Prioritize interconnection that uses existing and/or planned transmission capacity or can be upgraded at speed and reasonable cost through use of market ready solutions such as grid enhancing technologies like dynamic line rating and storage as transmission.
2. Encourage certainty, speed, and collaboration by engaging in the interconnection study process when developers have reasonably certain information and with transparent early and on-going engagement from transmission owners.
3. Align interconnection, transmission planning, and resource planning processes and incorporate developer and interconnection insights.
4. Enhance the queue management procedures with a focus on reducing uncertainty and providing timely outcomes.

Using these principles, AES New Energy Technologies proposes an objectives-driven interconnection process that requires collaboration and delivers both reliability and certainty to its participants. 

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

AES New Energy Technologies believes that the CAISO has well identified a symptom of a current lack of transmission capacity and an interconnection process designed for our historical grid which is primarily focused on ensuring reliability.  The key causes of the massive increase in interconnection requests are: (1) the increased demand for renewable resources driven by state policy, federal legislation, and consumer desires; (2) participant uncertainty regarding receiving a point of interconnection that is deliverable and affordable to their project; and (3) participant uncertainty regarding the time for determination of item (2).

AES New Energy Technologies agrees that under the current conditions for new generation development and interconnection, we cannot efficiently accommodate all applicants, however, we encourage the development of a process that still protects the principle of “not unduly discriminatory or preferential access” while meeting state policy and reliability needs as well as other objectives of our energy system such as consumer demand.  Ideally, such a redesigned process will be paired with and inform proactive transmission planning so that needed transmission lines and capacity can be built strategically and outside of the ad hoc interconnection process.

Considering these comments, we offer for the CAISO’s consideration the following revised Problem Statement #1 “Interconnection Request Intake”:

“To meet changing demand for renewable energy that is safe, reliable, and affordable, we need to evaluate for interconnection an increasing number of generation projects under development.  Our current interconnection process is primarily focused on ensuring grid reliability and does not ensure that connected projects meet a more comprehensive list of shared stakeholder objectives nor drive certainty for participants in a timely way.”

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

AES New Energy Technologies believes that the CAISO has identified another symptom of current lack of transmission capacity and an interconnection process designed to deliver reliability, not to ensure timely connection of the projects that best meet shared stakeholder objectives.  One of the root-causes of projects failing to reach commercial operations that is also within the scope of the planning and interconnection process is that a project must wait for its assigned transmission capacity to be built before it can connect and energize.  While remaining in the queue, a project must carry the costs of deliverability allocation retention criteria and the risk that transmission upgrades may not be completed in a timely manner.  These costs and risks can be mitigated at least in part through increased certainty. 

AES New Energy Technologies agrees that the current processes for managing the queue do not facilitate a timely or optimal development process.  The queue management processes must be redesigned to be objective-based and ensure that transmission capacity is allocated in line with defined stakeholder objectives.  Objective-based processes are particularly important when resources such as transmission capacity are scarce.  A key part of the development process is to select between potential projects for greater certainty of success and return on investment.  A timely and efficient interconnection process and allocation of costs has direct positive impact on developer go / no-go decisions.

Considering these comments, we offer for the CAISO’s consideration the following revised Problem Statement #2 “Management of Outstanding Interconnection Requests”:

“The current interconnection queue management processes are not designed to help developers make go / no-go decisions.  Developers currently struggle to prioritize projects because of limited transmission capacity and uncertainty as to interconnection timing, cost, and final build of transmission facilities.”

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

AES New Energy Technologies believes that the Concepts presented by the CAISO should be addressed in the Working Group Sessions as they are creative solutions with some merit.  However, the details of implementation will matter greatly to their success and/or complexity.  Therefore, we respectfully suggest that the CAISO engage its stakeholders to first establish clear Problem Statements and Principles and only then consider these Concepts and any others that may be proposed in light of those aligned Statements and Principles. 

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

AES New Energy Technologies proposes the following concepts that create an objectives-driven interconnection process that requires collaboration and delivers both reliability and certainty to its participants.  The proposed process should provide grid access to projects meet co-optimized stakeholder objectives including:

1. Achieve decarbonization goals.
2. Provide safe, reliable, and resilient electricity.
3. Create and deliver electricity that is affordable and equitable.
4. Ensure a fair process that is not unduly discriminatory or preferential.
5. Consider energy security and diversity.
6. Execute efficiently at speed and scale.

These shared stakeholder objectives are consistent with the foundational reason for which we have interconnection, principally that we are connecting new generation to changing load, ideally over existing transmission facilities.  Where incremental transmission capacity is needed – for example, tie lines and point of interconnection substation upgrades – interconnection processes appropriately allocate those costs to the interconnection customer.  

Additionally, a successful interconnection process results in connected new generation and must, therefore, take into consideration the generation development process.  A collaborative and efficient interconnection process would bring transparent and reasonably certain information to the table over which stakeholders align and find solutions to connecting projects to the benefit of load.  This means that developers need to have certain minimum information about a project to inform the interconnection process and line owners need to offer transparency early and often about what it means to connect into the system.  To achieve the level of information needed and productive collaboration, there should be more windows for filing interconnection requests and filings should be resolved within a period consistent with the developer timeline to help drive certainty.

Additional near-term policy and technology changes should be considered when redesigning interconnection.  For example,  

1. Drive certainty and efficiency by requiring accountability from interconnection participants, participating transmission owners, and the CAISO in meeting milestones.  
2. Require queue advancement and retention criteria that appropriately match the phase of project development and the construction of any associated transmission capacity.
3. Encourage flexibility and appropriate incentives for project changes while in the queue that provide net positive benefits when considering shared objectives.
4. Technological improvements that aid in processing the interconnection queue such as improve interconnection request portals with real time feedback and integration into system models.

Concurrently, the long-term transmission planning process must be revised.  The existing process is to reactively build transmission capacity as individual generators request connection, which is inefficient and burdens stakeholders with higher costs when compared to building infrastructure through proactive and coordinated planning.  The CAISO’s recent long range transmission planning effort is a step toward the long-term solution to building the capacity we need to connect renewable resources.  An improvement in planning would be to include insights from developers and the interconnection process in identifying (a) growing demand, (b) areas for renewable development, and (c) the lines to connect them. 

AES New Energy Solutions believes these concepts address both of the Problem Statements proposed in our comments using the Principles proposed in our comments to build an objectives-driven interconnection process that requires collaboration and delivers both reliability and certainty to its participants. 

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

AES New Energy Technologies appreciates CAISO’s desire to move quickly on the IPE Track 2 initiative to ensure that current and future projects are built and connected to serve customers.  We look forward to participating in the three working group sessions planned for June 2023 and encourage a forum that will allow for robust engagement on the Problem Statements and Principles for Interconnection Reform.  If participants are able to align around those items quickly, then we can envision the June sessions being sufficient.  However, AES New Energy Technologies encourages the CAISO to be flexible and schedule additional working group sessions to allow stakeholders to present Concepts and Methodologies that address the Problem Statements with the agreed Principles.

Generator interconnection is a nationwide problem that both ISO and non-ISO regions are grappling with.  AES New Energy Technologies views the CAISO IPE track 2 initiative as an opportunity to build a collaborative, objectives-driven process that encourages certainty and creates a bias to action that will augment the state’s leadership in enabling a clean energy future.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

Upstream appreciates the effort undertaken by CAISO to address the on-going interconnection related issues that have developed as California moves to decarbonize the electricity sector.  

CAISO’s Track 2 Discussion Paper has one overarching theme – to take the development and siting of renewable and energy storage projects away from experienced developers and replace this with a “central planning” type interconnection structure.  The QC14 “Supercluster” and the QC15 “Megacluster” clearly demonstrate that the current interconnection regime is broken, but CAISO “shouldn’t throw the baby out with the bathwater.”  Similar to the efforts currently underway at FERC in the “Improvements to Generator Interconnection Procedures and Agreements” proceeding, CAISO should work to further tighten existing interconnection rules under the GIDAP to limit the number of speculative projects entering the queue.

Transitioning to a “central planning” type interconnection structure would pose a number of risks to California’s ambitious decarbonization goals.  Through a thoughtful and robust stakeholder process, CAISO and the developer community must work to address the following risks associated with the concepts put forth in the Track 2 Discussion Paper;

1. CAISO proposes to direct interconnect requests toward approved or pending transmission upgrades.  These transmission upgrades often take ten or more years to permit and construct and developers would likely wait to start permitting renewable projects until these transmission upgrades are substantially advanced.  If transmission upgrades take ten years to reach commercial operation and CEQA and/or NEPA takes five or more years for a renewable project, then CAISO would find itself managing an interconnection queue with projects that have languished in the queue for more than fifteen years.  The current process works in parallel (developers permit projects in parallel to policy-driven upgrades), but as proposed the timeline would convert to a sequential process that would introduce further delays to projects achieving commercial operation.  
2. The three concepts put forth by CAISO would favor the largest developers and eventually result in an oligopoly that would harm ratepayers through higher energy costs and rates.      

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

The current generator interconnection processes cannot efficiently accommodate all applicants because the “bar” to enter the queue cluster process is simply set to low.  Interconnection Customers were still allowed to post a deposit in lieu of Site Exclusivity in QC14 and QC15 and the cost of the deposit in many instances is less than the cost the developer would pay under a land option agreement. Implementing a site control requirement will be an excellent way of allowing projects with the highest viability to advance while reducing the number of non-viable projects in the queue. If CAISO wants to reduce the number of projects in the queue, then site exclusivity must be required with the interconnection request or within thirty days of the Scoping Meeting.  The deposit in lieu of Site Exclusivity needs to be eliminated in its entirety from GIDAP.  This site control modification to the GIDAP would allow for the existing interconnection framework to remain primarily intact and functioning while accomplishing the primary objectives of the reform.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

“Many projects in the interconnection queue do not proceed to commercial operation as expected” because of the regulatory structure of the queue cluster process itself.  There is very little barrier to entry (such as site control prior to the start of the Phase 1 Study) and once a study has commenced, interconnection customers have very little incentive to withdrawal from the queue after making their Initial Posting of Financial Security.  Prior to the 2021 IPE, the conversion of projects to Energy Only created a dynamic whereby developers tended to withdraw projects from the queue after two unsuccessful TP Allocations.  Collapsing the Allocation Groups into four and allowing Energy Only projects to compete at an equal standing as FCDS projects eliminated this dynamic and will lead to a bloated queue where developers have no incentive to withdraw projects unless CAISO provides a one-time mechanism to allow TC through QC14 projects to withdraw from the queue and retain the entire amount of their financial security postings.

Furthermore, CAISO is overlooking the fact that (for the uninitiated) California has one of the most difficult permitting regimes in the country.  Depending on the size and scale of a project, navigating CEQA and/or NEPA can take more than five years.

The vast majority of projects that languish in the queue “without indication of their near-term viability or intent to proceed to contracting” are not in that position by choice – they’re in that position because they’re waiting for policy-driven upgrades that add incremental deliverability.  As evidenced in the 2022-2023 TP Allocation, the approval of Manning Substation relieved the Gates Constraint and now those projects are immediately able to come online and provide much needed NQC and RA.  Is the question a lack of project viability, or a lack of policy-driven upgrades through the TPP that relieve deliverability constraints and allow California to achieve its carbon reduction goals? 

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

Upstream strongly opposes a “central planning” type model because of the risks it poses to the renewable build-out and California’s carbon reduction goals as further outlined below.  
 

Concept 1

“The ISO will categorize interconnection requests by the TPP zone to which each project is seeking to interconnect.” 

• • What if CAISO identifies a transmission zone and the local jurisdiction places a moratorium on utility-scale renewable development (this happened in San Bernadino County with utility-scale solar)?
  • What if CAISO identifies a transmission zone that is planned but ultimately the approved upgrade(s) is never built or significantly delayed (like the majority of large transmission projects in California)? 

Concept 2
“This proposal would rely on LSEs or other offtakers within the ISO providing a list of projects they are interested in being studied to inform their procurement processes.”

Ratepayers ultimately win when LSEs are able to hold solicitations that receive a robust response from a large number of projects and developers.  What CAISO proposes essentially flips the entire contracting process on its head.  LSEs would be required to select projects and developers prior to having interconnection costs and timelines available and prior to any actual development work being done on the project.  Limiting the number of projects in competitive solicitations would harm ratepayers with higher rates.  

Solar and wind resources are stronger in certain geographic areas of the state.  How would CAISO prevent all LSEs from allocating their project portfolios to Imperial Valley 220kV for solar and Windhub 220kV for wind?

How would CAISO prevent LSEs (namely ESPs) that are also developers from “gaming the system” and selecting their own projects for approval?

Concept 3

“This proposal would rely on an auction process to determine the projects that would proceed into the phase I study process.”

Upstream strongly opposes Concept 3 due to the discriminatory construct proposed in the Track 2 Discussion Paper.  Concept 3 favors the largest developers and would ultimately result in an oligopoly that harms ratepayers through decreased competition and increased rates.  

Additionally, the CAISO must consider the complexities of developing a utility-scale scale energy project in California and the value an experienced developer brings having successfully completed projects before. Shifting to an auction process presents significant risk of potentially excluding experienced developers from the opportunity of working on projects which may greatly decrease the viability of the projects chosen to move forward. The auction process has potential to be detrimental for all stakeholders.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

1. Please provide a summary of your organization’s comments on the 2023 Interconnection Process Enhancements (IPE) track 2 discussion paper and stakeholder call.

Vistra appreciates the CAISO launching track 2 of the Interconnection Process Enhancements 2023 effort exploring comprehensive reforms aimed at curing the overheated queue issue. We respectfully submit these high-level comments on the principles, problem statement, concepts put forward by the CAISO.

Background

Vistra is a leading, Fortune 500 integrated retail electricity and power generation company based in Irving, Texas, providing essential resources for customers, commerce, and communities as the nation’s largest competitive power provider and one of the nation’s largest competitive retail providers. In California, Vistra and its subsidiary Dynegy Marketing & Trade (Vistra) own and operate 110 MW of jet-fuel combustion turbines at its Oakland Power Plant, 1,020 MW of efficient combined cycle gas turbines at its Moss Landing Power Plant, and 750 MW / 3,000 MWh of energy storage at its Moss Landing Energy Storage Facility. Through its subsidiaries, Vistra operates the Moss Landing Energy Storage Facility and the Moss Landing Power Plant to provide Resource Adequacy (RA) capacity and energy and ancillary services (E&AS) to the grid.

More relevant to this effort, Vistra is currently developing up to an additional 1,260 MW / 5,040 MWh of combined storage projects at our fully owned and controlled Oakland[1], Moss Landing, and Morro Bay sites to provide Resource Adequacy (“RA”) capacity and E&AS. Vistra is exploring additional development opportunities for clean energy or carbon neutral new resources to help advance California’s reliability and energy goals. Any future projects will need Full Capacity Deliverability Status (FCDS) so that they can provide both RA and E&AS services, without the FCDS any future projects will most likely be unviable. Through the interconnection process, any future project needs to receive Transmission Plan Deliverability (TPD) allocations to afford it FCDS, which is required to submit an offer into solicitations for RA.[2]

This is the chicken and egg problem. Non-utility developers (majority of developers) need TPD allocated to a project for that project to receive FCDS, where FCDS is required to be able to offer into a long-term RA solicitation a new project with the rights to sell RA. If the interconnection rules require having already sold RA to gain priority to those rights but the non-utility developer has no rights to sell RA, then the non-utility developer cannot participate in the long-term RA solicitations to execute the contracts to gain priority because it does not have the priority. The interconnection process’ chicken and egg problem.

As a non-utility developer, owner, and operator, Vistra is developing resources providing long-term RA services to our Load Serving Entity partners. We retain the ownership and operation of our assets, which is critical to bringing cost-competitive offers to our partners because the projected E&AS value allows a more competitive long-term RA offer. We bring value to California resource procurement activities through our credibility, demonstrated performance, and risk management practices. These advantages allow us to bring cost-competitive and proven solutions to our partners if a project can receive TPD to support FCDS. However, Vistra has faced challenges with advancing projects needing deliverability due to being a non-utility developer.

The CAISO’s various interconnection enhancements in recent years have erected barriers for non-utility developers seeking to interconnect new projects to the grid.

Non-utility developers are unable or unwilling to take risks associated with participating in solicitations without achieving TPD allocations, which are necessary pre-requisite to receiving FCDS in order to sell RA. In this respect, non-utility developers are placed at a competitive disadvantage with utilities and end-use customers. It seems to us that non-utility developer projects are deprioritized seemingly solely because we are neither a utility or end-use customer.[3] Utilities that are also Interconnection Customers (IC)  do not face the same challenge because CAISO has a long standing practice of preferencing utility developers where it “has always been CAISO policy to avoid utilities needing to execute agreements with themselves or petition the Commission for waiver to meet CAISO requirements”.[4] Similarly, we believe that end-use customer developers were afforded a path to support they are serving their own load.[5]

Our challenges with rules that disadvantage non-utility developers’ ability to compete for TPD and that deprioritize site control or permitting progress as criteria for “first ready” are exacerbated by (1) a combination of an overheated interconnection queue and (2) limited headroom available to facilitate interconnections for full capacity deliverability status. As such, we agree with the CAISO that there are issues with the interconnection process, as well as resource planning and transmission planning processes, that merit a deep consideration of the issues facing all market participants and identifying solutions that get to the root of the market participants’ issues.

Problem Statements (Section 1)

At a high level, Vistra agrees with the two “problem statements” identified by CAISO. But, Vistra believes that the working group discussions need to get at the heart of what problems are preventing projects from advancing through the interconnection process, rather than focusing on the result of the underlying issues of too many interconnection requests and projects staying in the queue without reasonable prospects of timely development.

Vistra recommends that the focus of the June 20^th and June 21^st working group should be to scope out the underlying issues resulting in excessive amounts of interconnection requests and hampering interconnection requests ability to move timely through the study process, regardless of whether they occur under forward resource planning processes, transmission planning processes, or under the interconnection processes. We request the CAISO facilitate discussions between Interconnection Customers, whether a Load Serving Entity, End-Use Customer, or non-utility developer, on their unique experiences or challenges procuring or developing viable, cost-competitive projects. Out of this discussion, Vistra hopes the CAISO will categorize the types of issues developers are facing, and whether they are resource planning-related, transmission-related, or interconnection-related, and whether they are within the CAISO or CPUC scope, so that the underlying issues can be appropriately addressed. While Vistra had hoped the initial working groups in this effort would be joint CPUC and CAISO workshops because the underlying issues span both agencies, this approach could help meet that need.

Principles (Section 3)

First, Vistra requests the CAISO specify in its revised principles that the interconnection process should maintain open access and avoid unduly discriminatory or preferential treatment. Preferencing utility development or end-use customer development over non-utility development unduly discriminates against non-utility developers. Rules that define priority based on the type of market participant rather than independent eligibility criteria are on its face preferential. [6] We hope the CAISO will commit in this track to prioritize processes that allow open access and do not unduly advantage certain market participants over others. [7]

Second, Vistra requests the CAISO clarify its principle that CAISO’s interconnection processes should “prioritize interconnection in zones where transmission capacity exists or new transmission has been approved.” Regardless of the nature of the transmission project from the reliability, policy, or economic studies. The CAISO should be indifferent as to which type of transmission projects result in increasing the headroom on the system to support new resource interconnection. For example, if an economic study project results in increasing the deliverability capability on the grid above that which the policy portfolios themselves through either reliability or policy studies would have provided because this could further increase the available headroom.

Third, Vistra requests the CAISO add a principle similar to that the CAISO’s transmission or interconnection processes should allow for Interconnection Customers or other agencies with transmission funding to “subscribe” to partially fund network upgrades (NU) needed to facilitate new resource interconnection so that new transmission upgrades can be proposed and collectively funded. This principle will allow for the CAISO’s first principle on prioritizing interconnection in areas where transmission is available, because it affords a fair mechanism to ensure sufficient transmission exists or is planned. If there is such a mechanism, then there can be more confidence in any proposals that hinge on limiting interconnections to some proportion of existing or planning capability. Further, there is a need to consider how state or federal transmission funding could be used to fund specific transmission projects and this principle would allow for consideration of mechanisms to afford a path for projects or programs that are committed to achieve commercial operations or awarding grants to support commercial operations to have a path to fund network upgrades to support their interconnection. Concepts such as prioritizing TPD allocations based on willingness to subscribe to offset network upgrade costs that resulted in the TPD would be consistent with this type of principle.

Vistra will continue to consider what principles should be adopted in this effort and bring additional thoughts to the working group meetings.

[1] Re-development of Oakland Power Plant would also facilitate the repowering of its jet fuel-fired Oakland Power Plant with carbon neutral energy storage to further the retirement of the remaining units.

[2] Given Vistra’s belief that FCDS is required to participate in Integrated Resource Planning or Central Procurement Entity solicitations that could procure a new resource under long-term RA agreements, Vistra believes the CAISO existing TPD allocation groups in practice do not actually mean that allocation group A includes projects that have executed a Power Purchase Agreement, but instead that it only includes projects that are submitted by utility developers and potentially end-use customer developers. These types of developers get priority over non-utility developers by virtue of these entities’ type of entity rather than eligibility criteria, because non-utility developers seeking FCDS also intend for the project to provide RA.

[3] Notably, one such example is our efforts to redevelop mothballed generating facilities at our fully owned and controlled Morro Bay site where we hold 100% site control, are located next to existing interconnection and transmission facilities, and are advancing timely through environmental permitting processes. This project should be considered viable, but because we are a third-party developer instead of a utility or end-use customer it is seemingly being considered “speculative”. We question if this is truly CAISO’s intent, and if not, this reform should correct this signal.

[4] CAISO Transmittal Letter, ER22-2018, June 2, 2022, footnote 33.

[5] CAISO Transmittal Letter, ER23-941, January 26, 2023, Page 7 and Page 26.

[6] CAISO’s rule changes in recent years have shown a shifting towards limiting non-utility corporations ability to develop projects to successfully receive an allocation to support full capacity deliverability status (FCDS) such that we can offer the projects into the procurement solicitations. See Vistra’s Initial Comments on Interconnection NOPR under RM22-14 discussing this principled position in more detail, October 13, 2022, Page 8-11, https://elibrary.ferc.gov/eLibrary/filedownload?fileid=B30BD723-CFC2-CEC2-85ED-83D310200000.

[7] Vistra acknowledges that FERC has approved the existing preferential rules because there was an insufficient record to find them unduly preferential. In this process, we are asking the CAISO to avoid this challenge altogether by avoiding rules that would differentiate access based on the type of market participant, and instead pursue rules that are unbiased and independent. This will create a smooth pathway through the FERC review process.

2. Please provide feedback on whether the proposed problem statement below addresses the issues associated with new interconnection requests for clusters 14 and 15 and possible trends in future interconnection requests.

The massive increase in interconnection requests seeking to meet the accelerated cadence of resource development now needed by the state on a sustained basis has overwhelmed critical planning and engineering resources across the industry. The current generator interconnection processes simply cannot efficiently accommodate all applicants, and must be substantially redesigned to meet state policy and reliability needs.

Vistra finds the description of the problem statement is too simple because it focuses on the outcome – interconnection requests amount are too high and in areas with limited deliverability. It is more important to consider why the amount and areas of interconnection requests received are too high or in areas that have insufficient headroom. In upcoming meetings, the CAISO should facilitate discussions that dig into why the interconnection request levels are so high or in areas with limited deliverability available.

The adverse outcomes that CAISO identified are not the only undesirable outcomes that Vistra has observed. Some key undesirable results of the high interconnection requests and less viable project phenomenon are:

• Staff needs more time than the pre-supercluster cadence of roughly two-years to perform study processes for the superclusters, which is increasing risks of extending timelines from ~two years to three+ years at best and from on average ~4 to ~5+ years or more if parking is needed.
• Staff resources are oversubscribed to the magnitude of projects where the ability to hold annual interconnection windows seems to be at risk.
• The information provided in the phase I study results are unrealistic, including the potential cost exposures, that engineers and developers’ confidence in phase I results have diminished significantly. Confidence has waned significantly such that IC appear unwilling to make commercial decisions to downsize or exit the queue based on phase I results. The magnitude of projects, many of them speculative, lead to poor inputs to the phase I studies that result in inaccurate results undermining the effectiveness of the phase I studies. This is one of the more concerning outcomes.
• Lack of transparency in the public queue leads to challenges analyzing the queue in transmission zones/areas to separate out likely viable versus less viable projects. For example, projects submitted by an IC with 100% site control should be considered more viable, because the IC owns and controls the land. Further, projects that are located proximate to existing interconnection facilities and transmission facilities should be considered even more viable because the cost to interconnect are more competitive in any solicitation assuming they can receive FCDS. These projects have the most likely path to achieving commercial operations, however they appear the same as more speculative projects without site control or access to transmission and interconnection facilities in the public queue. This lack of transparency results in IC analyzing commercial interest in the area not having insight into how many projects are “speculative”, and as such are inclined to assume most of the projects do not have site control or access to facilities. The lack of transparency into commercial readiness criteria, and prioritizing these projects, leads to insufficient incentives for developers to self-moderate their submissions to those that are viable or commercially ready. Instead, the rules and lack of transparency into commercial readiness incent speculative projects.

3. Please provide feedback on whether the proposed problem statement below appropriately addresses the issues associated with the number of projects in the existing queue that are neither progressing to construction nor withdrawing from the queue.

Following the study process, many projects in the interconnection queue do not proceed to commercial operations as expected. The current processes for managing the queue do not facilitate a timely development process, and a number of projects remain in the queue without indication of their near-term viability or intent to proceed to contracting or construction.

To reiterate, projects not progressing to construction or withdrawing from the queue is a symptom of the presence of underlying issues with the processes. We need to hear from ICs with these types of projects to better understand the nature of the challenges. Only after learning from our peers about the underlying drivers, stakeholders can develop specific proposals that target the core problems. With that caveat, the CAISO’s initial proposals seem reasonable. Vistra provides targeted feedback below.

• Material Modification Assessment (MMA) limitations when seeking Limited Operation Studies (LOS) should only apply to MMAs submitted after the LOS is requested. If an IC has submitted an MMA prior to requesting a LOS request, then whether it has been approved should be considered outside the IC’s control and as such not penalized. IC should still be able to request the LOS study nine months prior to commercial operations, and then have its previously submitted MMAs approved before commencing the LOS study without issue in a nine-month window. We can understand why MMAs may not be allowed after the LOS study methodologies have been finalized, but we would like to request narrow exceptions such as for inverter updates.
• On staying in the queue or being afforded flexibility to meet commercial viability criteria (CVC), we support strict timelines with respect to activities within the IC’s control. For delays that are beyond the IC control there needs to be some flexibility. For example, if it is more than three years after receiving phase II results there could be credible reasons the project has not submitted a notice to proceed or completed the third Interconnection Financial Security posting, such as the project is replacing an existing unit being held under RMR and the CAISO has not released the operational unit to facilitate moving forward. Additionally, PTO delays should also allow for an extension to remain in the queue.

4. Provide your organization’s high-level comments on each of the three Concepts for Managing Interconnection Request Intake, as described in section 4 of the discussion paper.

See Vistra’s high-level feedback on each of CAISO’s proposals:

• Concept #2 proposes the CAISO appears to raise some discrimination concerns to the extent it appears to no longer apply common rules regardless of market participant type.
• Concept #1 raises similar concerns regarding discriminatory treatment of certain developers. Removal of the criteria that appears to preference utility developers or end-use customer developers would be a beneficial reform and would allow Vistra to consider this concept more seriously. However, it still appears complex and time intensive for staff such that we fear it would fail to reduce the magnitude of interconnection requests or better manage CAISO workload. This appears to not address the issues where poor incentivizes exist to self-moderate interconnection requests such that developers submit more viable and commercially ready projects. It also appears complex where it would still impose high workloads on staff.
• Concept #3 is the most independent approach that supports open access, non-discriminatory, or non-preferential processes. However, it is novel and will be challenging given the lack of FERC precedent to guide its development. The intent of the proposal seems to be very similar to what Vistra envisions for its network upgrade subscription model, also called transmission open season, which would allow financial investment to differentiate projects access but under a framework with regulatory precedents from merchant transmission or merchant pipeline funding models. Vistra is open to considering the idea of an auction instead for the IC to be able to self-indicate that the project is commercially viable and as such the IC is willing to “pay to play”. We will further consider the concept but caveat that we continue to believe leveraging the merchant line precedent and model is a less risky approach to allow developers to make a financial commitment to increase confidence in the projects. We hope to explain why and urge CAISO to pivot in this direction.

5. If your organization would like to present a proposal on an alternative methodology for accomplishing the fundamental principles in the discussion paper at an upcoming working group meeting, please provide a summary of your proposal, including a statement on how the proposal addresses the problems identified and adheres to the principles outlined in the discussion paper and stakeholder comment.

Vistra believes the interconnection reforms should adopt a non-discriminatory, first-ready, first served approach. We support rules that disincentivize developers submitting speculative projects that are less viable or not commercial ready as well as to disincentivize parking excessively in the queue. CAISO’s interconnection processes need to better advance commercially viable projects from any type of Interconnection Customer ensuring non-discriminatory, open access that best supports California needs and disincentives submitting non-commercially viable projects. It also needs to create an environment where projects are willing to withdraw or downsize if they receive information indicating they are not viable.

Vistra has submitted comments on the CAISO and FERC processes over the last two years providing significant feedback and proposals on interconnection and transmission enhancements. Our current thinking is to present an updated version of our proposals described in both FERC and CAISO filings highlighted below.

• Optional feasibility cluster separate and parallel to common cluster: Adding optional feasibility clusters similar to those offered in other markets as a mechanism to provide “speculative” projects the information they are seeking in a much higher level, faster feasibility study outside the normal cluster process that would not require a withdrawal decision because this low cost path to receive feasibility information is opted into in lieu of the common cluster studies at a much higher cost cluster study process that would progress to phase I and II studies.[1]
• Network upgrade open season/subscription model available to Interconnection Customers (IC) and other eligible parties: Adding open seasons for IC or other eligible and interested parties such as federal or state grant programs to subscribe to network upgrades in the transmission planning processes, where the IC or state agency would receive a commensurate share of the increased deliverability relative to their share of the network upgrades. Vistra believes this approach has significant benefits because it also allows a Tariff codified process for the federal and state funding that have been identified for transmission projects that currently have no mechanism to provide that funding to CAISO to support a portion of any network upgrades for resource interconnections.

Please review our previously filed comments on “open seasons” for more detail. [2]

[1] Vistra Comments on the Interconnection Process Enhancements 2021 preliminary issue paper and stakeholder workshop, November 5, 2021, response to #3 describes some first ready enhancements, https://stakeholdercenter.caiso.com/Comments/AllComments/93e0040c-4e2e-4d37-8b2c-7eb0e7c55aa9#org-f382caf5-b32a-43e5-a759-fe484ea5d2c2.

[2] Vistra’s Initial Comments on Transmission and Interconnection ANOPR under RM21-17, October, 12, 2021, https://elibrary.ferc.gov/eLibrary/filelist?accession_number=20211012-5513; Vistra’s ANOPR Reply Comments on RM21-17, November 30, 2021, https://elibrary.ferc.gov/eLibrary/filedownload?fileid=FF0FAB4D-FEEE-C055-9F6F-7D7262400000; Vistra’s comments on Interconnection Process Enhancements 2021 phase 1 issue paper and straw proposal, Page 6-10 on concepts for cluster 15 and beyond, January 18, 2022, https://stakeholdercenter.caiso.com/Comments/AllComments/fb35aeb3-10f4-4351-9232-040ec49cfd84#org-35e3746d-a302-4bf3-971d-48a6735f097c; Vistra’s Initial Comments under RM21-17, August 17, 2022, https://elibrary.ferc.gov/eLibrary/filedownload?fileid=45A5B320-C13F-CFD0-A657-82AD8C200000; Vistra’s comments on transmission planning process enhancements straw proposal, October 17, 2022, response to number 3 includes a discussion of need for transmission network upgrade open seasons, https://stakeholdercenter.caiso.com/Comments/AllComments/fe469961-883e-4454-9adb-44eb6098b450#org-463be33a-5eca-42c9-a5d3-57d55167d637.

6. Provide your organization’s comments on the IPE Track 2 proposed scope and schedule.

It is premature to opine on the appropriate scope as we need to scope out the problem statements at the June 20^th and June 21^st working group meetings to identify underlying issues facing resource development and interconnection processes.

Vistra requests the timeline be revised to take this effort to the February 2024 Board of Governors meeting. We are concerned this schedule is too tight, and will not enable sufficient stakeholder engagement. We respectfully request that the CAISO extend the timeline given the complexity and importance of this topic. For example, if CAISO begins validating Cluster 15 on May 1, 2024, then it would need to have Cluster 15 rules approved by May 1, 2024. With a 60-day timeline at FERC, the latest date that CAISO could file the Tariff Amendments for May 2024 effective date is March 1, 2024. This would make a Board of Governors meeting in February 2024 feasible while still supporting May 2024 effective changes to apply to Cluster 15 and beyond. Consequently, we request the timeline be extended two months to February 2024 Board of Governors meeting.