David Golembeski:
If you could somehow flip where we could get the federal government to require utilities to report all of this data, this would be a game changer.
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John Farrell:
How weird is it that utility companies who have their own interests in power generation and grid upgrades also control the means by which their competitors can get online? Fortunately, states can protect fair and open grid access by establishing standard grid interconnection rules. My guest today, David Golembeski, senior program manager with the Interstate Renewable Energy Council, or IREC, walks me through the key elements of effective and evidence-based grid rules from their recently released report, Freeing the Grid. I'm John Farrell, Director of the Energy Democracy Initiative at the Institute for Local Self-Reliance, and this is Local Energy Rules, a podcast about monopoly power, energy democracy, and how communities can take charge to transform the energy system.
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John Farrell:
Dave, welcome to Local Energy Rules.
David Golembeski:
Hi, John. Yeah, thanks for having me.
John Farrell:
My pleasure. Well, I love to start off by just asking all my guests what motivated you to get into the work that you do in clean energy or climate work. Is doing interconnection policy sort of what you wanted to do when you grew up?
David Golembeski:
Yeah, I have a unique avenue of getting into clean energy, but it might become more relevant in the coming years. So my dad, we used to work for a wind developer. He used to take me out to some projects in New York, in Pennsylvania, and some other areas post when they were operational, when they were under development. And I can remember one time there was a project that was under development and we went to visit the project because there was an environmental review happening and it was to determine if there was a risk to the Indiana bat, which is an endangered species in the region. And if the Indiana bat was found around this site, it could potentially shut down the project. And so there was this review. They hired this consulting firm to put up a bunch of netting around the forest in the woods around where the project was going to be cited.
And we went out with that team and we were checking out the nets to see what bats were being caught. And I thought, wow, this is really interesting. This is really cool. I was already interested in having climate change, understanding that and wanting to have a clean future and then seeing this development side was really interesting. And so from then on, I started an internship, some internships in college in clean energy on the public policy side and that's where I was pretty hooked.
John Farrell:
Well, I don't think anybody's ever used bats as the description for how they got into this before. So I love that story. Thank you for sharing that. Let's dive right into interconnection, but before we get into some of the weeds of it, which I definitely do want to get to, let's just do sort of like the 10,000 foot view. Why does interconnection matter for people who care about clean energy? What makes this issue so important to understand if we're looking at how we transition the grid to cleaner resources?
David Golembeski:
Interconnection I'd say is fundamental to DERs such as solar and storage. It's fundamental to them being affordable and widely adopted and overall a clean energy future. So out of any factor that influences the clean energy project development, the utility's interconnection process has one of, if not the biggest impacts on these things, on affordability, on wide adoption and on a clean energy future. And so the interconnection proces, and so the timelines, the costs, the technical requirements, when those are modern and well-designed, that can support faster and affordable DER integration. But on the other hand, if those processes are outdated or they're poorly designed, it can slow or even halt DER growth because these projects will face unnecessary obstacles, costs and delays.
John Farrell:
Thanks. I really appreciate that. I should mention for people who are ... Well, I think most people who listen to this podcast will know exactly what DER means, but it means distributed energy resources. And if you just substitute the word solar or battery storage in there every time you hear it, you'll understand the whole story of this podcast. But Dave, thank you so much for that kind of big picture view about the importance of getting these rules right. So interconnection sort of sets, I've described it before as like the rules of the road, because I think of it as like stoplights and speed limits and all this kind of stuff. So one of the things that I find so interesting about this is you have utility companies who are implementing interconnection. They're the ones that are managing the timelines that are quoting the prices to the connecting projects that are overseeing the technical requirements.
These utilities often have a conflict of interest with doing interconnection well, which is because in vertically integrated states where the utilities own power generation, they might be competing to provide power with the projects that are connecting to the grid. Even in states that don't have utilities owning power generation, those utilities might be otherwise building grid infrastructure like transformer upgrades that could be offset by distributed energy resources, solar storage, that kind of thing. What are the mechanisms that we have to hold utilities accountable to these policies? And if you could explain a little bit too for folks, what is the role specifically that like the state legislature or the public utilities commission plays in that enforcement?
David Golembeski:
So we think that the foundation to utility accountability is reporting and data transparency. And so the utilities would report and provide this data to the regulators, but unfortunately at the distribution level, there is a deficit of data of reporting and transparency for DER interconnection. So understanding if state interconnection rules are followed and creating accountability is really challenging. So for example, while many states have deadlines to complete, let's say the initial review step, like the utility doing a technical review and doing some screening practices to determine if it has any negative impacts onto the grid, that step is often, it might be 10 business days for a small project. So while a state might have that deadline, few states require utilities to report on their compliance with meeting that deadline. So we're completely in the dark if the utility is adhering to that 10 business day deadline, for example.
And it's not until it becomes an overwhelming problem where numerous customers are complaining about the same thing to the regulatory commission that there becomes a shared knowledge or understanding of the issue. So requiring utilities to report on their compliance with review deadlines to also post a public interconnection queue with all the projects that are under review or sharing detailed and itemized upgrade cost estimates with the customer, that all gives insights into utility performance and helps the public and regulators hold them these utilities accountable. And so it's really important for regulators to, if they have access to this data and this reporting, to continuously track the utilities compliance with the timelines and with the broader interconnection rules.
John Farrell:
One of the things I found really fascinating in the past few years was how not only do you have these rules within a state, so you want, as you said, like a public interconnection queue, you want detailed itemized costs, you want reporting from utilities to the public utilities commission. And as we'll talk about your report, obviously that differs from state to state because each state is its own fiefdom when it comes to setting these rules. I remember working on a petition to the Energy Information Administration, which interestingly polls distribution utilities across the country every year for a whole bunch of data and I'm told that historically they actually did collect data on interconnection and no longer do so. So I'm wondering if you could just talk a little bit about would it be useful if this information were collected not just at the state level but at the federal level so that you could actually compare state to state and what might we learn from that?
David Golembeski:
Oh yeah, that'd be a game changer, but unfortunately that can't be done at the federal level because the federal government does not have jurisdiction over distribution level interconnections. So FERC, the Federal Energy Regulatory Commission is an agency for the federal government and they regulate transmission level interconnection, so large scale solar projects and they have pretty robust data and reporting requirements for regional transmission operators. And so those are the entities that manage transmission level interconnection, those utility scale projects. And so yeah, there is a ton of data that is really useful and they are able to hold their feet to the fire, those RTO's feet to the fire when they're not complying with the rules. At the state level, it is up to, as you mentioned, it is completely fragmented and it is up to each state to determine what are sort of the reporting requirements, what are the data requirements.
But yeah, I mean, if you could somehow flip where we could get the federal government to require utilities to report all of this data, this would be a game changer.
John Farrell:
I should follow up with you. I did a podcast interview and I'll stick it in the show notes with David Gall. He's with the Solar and Storage Industries Institute, which is like a nonprofit research arm of the Solar Energy Industries Association. And he was working with me on this petition to the Energy Information Administration. I'm guessing that the data collection is voluntary to be truthful, but they do have these surveys that they send to distribution utilities and it's where their data comes like on electricity sales and revenue that is data that I use all the time. So I've been super curious about whether or not there is a hook in there. We don't have to dive into it more because I actually really want to talk about the freeing the grid report. So I remember last time when freeing the grid was released, you had one state that earned an A, it was New Mexico and it was really around the up recent revisions to their interconnection policy that incorporated more around battery storage, which is a new technology and it's kind of unique because of course it can both produce energy by sending or effectively produce energy by sending it back to the grid as well as use energy.
So it has some different factors than the traditional kinds of technologies like solar where you're only having to deal with energy being added to the grid. You also have states that get Fs. I'd love to start there because if I recall correctly, a state that gets an F can be a state that literally has no interconnection policy at all. Is that true? You have states that simply don't even try to govern this?
David Golembeski:
Yeah. So there are 13 states with no statewide interconnection policies. So that means that the interconnection process is fragmented across utilities within the state. So each utility within the state creates and uses their own set of interconnection procedures and oftentimes it means that the state's utility interconnection process, their timelines, their costs are a black box. There is no transparency, certainty or accountability for what those practices are.
John Farrell:
I can imagine that then the consequence of this is that these are states that don't have a lot of distributed energy resources because if I have a business trying to sell these devices to consumers and then having to go through that interconnection process, that sounds pretty laborious.
David Golembeski:
Yes. Yeah, that is exactly how it coincides. And so it's unclear. I think part of it is those states don't see, there's no market for distributed energy resources so there's no need to have sort of robust interconnection procedures. There's not really issues with a Q backlog, for example, to where it's a necessity. A lot of states are reactive in putting interconnection procedures and it's not until it becomes a problem are they putting it in place. And so the regulators don't feel any ... Their feet aren't to the fire to do anything on interconnection.
John Farrell:
I think of some states like Alabama where there are a multitude of things that their regulators aren't looking at. And I was like, I don't know if their feet are to the fire doing anything because they don't even do resource planning for investor-owned utilities. So it's not a surprise that they would also not be working on interconnection. I don't know if Alabama is one of your F states, but I can just imagine. Yes. Let's talk about the states that do this well. So who gets an A this time around? Is New Mexico still getting an A and had anybody managed to join them since last time?
David Golembeski:
No one has joined New Mexico, but there were some states that moved up to a B and there are a few states that are very close to an A. So Oregon moved from a D letter grade in 2023 to a B and they're a borderline B. They're pretty close to being an A. And so they did a lot of great work. They overhauled their screening practices and incorporated energy storage and export control provisions into their rules. New Jersey also had a big leap. They jumped from a D to a B. Maine is now a B jumping from a C and Wisconsin moved up one letter grade from a D to a C.
John Farrell:
Talk to me about some of those. You ran through them kind of quickly. What were some of those changes and how do they make the interconnection process work more effectively to get these resources connected to the grid? And really just to be clear too, I sometimes like to say maybe too shorthandedly that this is about removing red tape, but it's not necessarily about moving red tape because it's not about saying there's less regulation. It's actually being more efficient with how things are regulated, like updating screening criteria so that you're actually focused more on what actually matters for the grid as opposed to having sort of broad and cludgy requirements that might not actually be relevant in terms of screening projects for whether or not they pose a reliability issue or not, for example.
David Golembeski:
Yeah. So on screening practices that refers to a set of questions, if you will, technical questions that are able to quickly determine if a project clearly would not have an impact to the grid. And so if they pass, we can quickly connect them to the grid. And those screening questions are conservative in nature, but in many states they are, we view overly conservative and they can unnecessarily send projects from this quick initial review to a really lengthy, costly study process. So that is a process that can take three or four or five months. And so you're subjecting that project to that study process and it is costly and it's delaying when that project can interconnect. Oregon also incorporated provisions related to energy storage. So previously it was unclear if energy storage projects could use these state interconnection procedures. So it was kind of really up in the air and so now it provides much needed clarity that, hey, solar plus storage, standalone storage projects can connect using these procedures.
And then New Jersey, for example, they improved some siting tools. So there's what's known as a pre-application report. And so that gives customers typically larger projects insights into the grid conditions that's at various locations on the grid. And so that can help them rather than having to enter their project at this particular location, they can understand if that is a viable location before entering. And so they can save a lot of time and money without needing to enter the queue.
John Farrell:
If I'm correct too, there are other things outside of interconnection policies that can help with that, like hosting capacity maps. I can reference that in the show notes for folks who want to dig deeper. Now there's like a publicly published map. You can just go online and you can click around and be like, oh, where the lines are green, there's capacity to potentially add a project. Can you talk a little bit about, since the last time freeing the grid was put out in 2023, are there some new criteria? Are there things that you've sharpened in terms of your evaluation, new kind of rules that help the interconnection process be more evidence-based as opposed to, as you said, sort of being sort of overly conservative?
David Golembeski:
So we haven't added any new criteria since 2023. There hasn't been significant innovation or new practices since 2023. And for some background, our criteria, we have 56 criteria of what are viewed as best practices. So for example, I mentioned the initial review of a small project that is sometimes 10 or 15 days. So that is a criteria if a state meets that best practice. Since 2023, there hasn't been major evolution of these practices. It's mostly been states getting caught up on national best practices. So you see, I mentioned Oregon and New Jersey adopting energy storage provisions, pre-application reports practices. A lot of states were kind of getting caught up. I mentioned one trend that is worth mentioning is cost envelope or cost cap policies. So New Jersey and DC both implemented these policies to combat widely varying utility cost estimates for distribution upgrades. So when a project moves through the interconnection review process and the utility comes back and says, "Hey, your project is going to ... If we connect it now, it might cause some adverse impacts to the grid." So we need to do a distribution upgrade so those impacts don't happen.
And the utility will do the study and they will come back with an initial cost estimate and let's say that estimate is $500,000 and the customer's like, "Okay, we can handle $500,000 for this distribution upgrade. Let's move forward with the project." And then the utility builds that upgrade and maybe what we're seeing is 90, 200 a year, multiple years after the fact, the utility comes up with a true up bill. So what is the final cost of that distribution upgrade? And now they say it's not $500,000, it's $3 million. And the customer, the developer is, "This project is no longer viable and no longer pencils out." They would have never built a project in the first place had they known that that upgrade was going to cost $3 million and it's disastrous for the developer. In reality, they can go bankrupt because of these. And so New Jersey implemented a 50% cost cap, DC implemented a 25% cost cap.
So meaning that the difference between the initial estimate and the final estimate cannot increase more than 25% in DC and no more than 50% in New Jersey. So that creates some certainty for the developer knowing that, hey, it's not going to be exorbitant costs to where it's disastrous for our bottom line.
John Farrell:
I'm super curious about how utilities can be so far off because as far as I know, maintaining and upgrading the distribution grid is basically their job all the time. So if they're this bad at estimating costs for these individual projects, what does that say I guess more broadly about how much we're paying to maintain the grid? That seems really odd. Have you done any kind of deeper dive into how utilities get this so wrong or is there any plausible reasonable explanation of why these estimates could be so far off from the initial to the final?
David Golembeski:
Yeah, I think that it's reasonable to expect that there is going to be some difference between the initial estimate, but as you mentioned, what we're seeing is it is wildly different. It is 300, 400% increases in the cost estimate and some of it has to do with the equipment that is available. Some of the equipment might not be available. Sometimes there is inflation on that equipment. The costs are more ... So that's certainly one factor, but again, for it to be such an increase is perplexing.
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John Farrell:
We're going to take a short break. When we come back, I ask Dave about flexible interconnection, about IREC's model policies, and what resources IREC provides for folks that will want to take action to improve their state's market for local clean energy. You're listening to a Local Energy Rules podcast with Dave Golembeski, senior program manager with IREC. Hey, thanks for listening to Local Energy Rules. We're so glad you're here. If you like what you've heard, please help other folks find us by giving the show a rating and review on Apple Podcasts or Spotify, five stars if you think we've earned it. As a bonus, I'll gladly read your review aloud on the show if it includes an energy related joke or pun. Now back to the program.
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John Farrell:
I was wondering if you could talk a little bit about flexible interconnection, because I was just thinking about, this is coming up with data centers, which obviously are giant loads and not potentially not covered. I mean, those are loads not covered under the interconnection procedures, but this idea behind trying to accommodate large new facilities on the grid and what people are saying is, "Okay, if data centers could be flexible, which is to say they could change the amount of energy they need to use, they might be able to avoid some of the grid upgrade costs that would otherwise be incurred." I've also heard that I actually was familiar with the term previously because of interconnection of generation like solar where the idea was, "Oh, maybe it's only a few times a year that the generation from the solar project actually would trip some sort of voltage thing or whatever, what have you on the distribution grid, maybe that project could just curtail or maybe the project has storage and they guarantee, oh, it's a 50 kilowatt project, but we'll never export more than 48 kilowatts because we'll just dump it in the battery when we get to that amount." Can you talk a little bit about how that could help address this problem as of upgrades?
Obviously it won't change if the utility is told this is the problem and whatnot, but I guess in the past, my understanding is utilities haven't necessarily been interested in trying to sort of play let's make a deal on how this project could happen and more so have been oriented around, here's a formulaic, this is the upgrade cost to connect your project. We don't really care what accommodations you could make. So could you talk a little bit about how flexible interconnection might work and to what degree it was included in the freeing the grid report?
David Golembeski:
Yeah. So it's not incorporated in freeing the grid because it is such a new and emerging practice, but it is something that IREC and myself are actively pushing in states throughout the country. And so there's two major forms of flexible interconnection. There is a static schedule based flexible interconnection and then there is a more dynamic flexible interconnection. And so the static based flexible interconnection is a developer will submit an operating a profile or schedule of what the output of their project will be over the course of the next year, over the course of the life of the project. And so what the developer can do is they can, if there is robust data, they can see when there is going to be grid constraints at different times throughout the year and they can reduce their project's output when those constraints occur and they can avoid grid upgrades and they can avoid the cost.
Grid upgrades can take many months, many years so they can avoid those grid upgrades and it can connect in the near term. And so dynamic is where the utility is very similar, but the utility has a centralized communications device and it communicates with the solar project, the energy storage project and in real time that device will curtail that project when a constraint is happening. And again, this is a great way to avoid grid constraints, avoid grid upgrades and get the project connected much faster.
John Farrell:
And it kind of goes without saying perhaps but is worth saying that either of these practices with flexible interconnection really relies on the utility having some robust and accurate data about its own system, which is hilariously not necessarily very common.
David Golembeski:
No, not at all. And there's some states that are exploring it right now. I mean, California that has always been a leader in solar energy storage, they're experimenting with some flexible interconnection practices. ComEd in Illinois is another one that is focusing on the dynamic side of flexible interconnection, but we're hoping in the next few years, a lot more utilities and states adopt flexible interconnection.
John Farrell:
Could you give me a sense, I want to paint this picture a litle bit more fully if we could, and I know I'm putting you on the spot with this question, but contrasting like a California, so they have over the years developed hosting capacity or I think they call it integrated capacity analysis. Other states have similar, like they're requiring utilities to provide monthly data on the capacity within their distribution system to host projects. Contrast that, maybe we can pick on Alabama again or some other state, like what is the limit of what utilities know about their own distribution system in some of these states where there hasn't been a lot of DER development? I guess can you give us a sense of like what they don't know about their own system in some of these places and how that is interplaying with the challenge of then getting good interconnection policy?
David Golembeski:
A majority of states, I'd say they probably have this data, but they just are not compelled or not interested in sharing any of this data, which is definitely a problem. I mean, every time a project interconnects, certainly they are definitely tracking that to maintain safety and reliability, they need to know where these projects are located to do all these types of analysis to determine if they're maintaining safety.
John Farrell:
I wanted to go a little bit bigger scale for a minute. So you mentioned that there's 13 states who have no state policy whatsoever. So interconnection rules are essentially set by each individual utility. Now you also have, as we've talked about, the variation state to state. There is interestingly right now a big campaign around solar permitting costs, which are... solar permitting of course is handled by the municipal jurisdictions cities, counties, townships and whatnot, but there's this big campaign to get more consistency at least within states. So it's a focus on state policy that would make consistent within a state what happens with solar permitting. Would it be helpful to have some sort of national campaign like that is that was talking about interconnection as well? And I guess a follow-up to that, I'm just thinking about like building energy codes. There is an independent body that releases a sort of like standardized code every few years and then when states want to do something about it, they basically say, "We're adopting the 2021 code or the 2023 code," and they'll do tweaks to it. I'm not saying that they don't change it at all, would that be something that would possibly work in doing this? So yeah, what would be helpful in getting from the really candid and thoughtful analysis that IREC is providing here about where we are to actually getting some real momentum to changing this and making our interconnection policies more sane across the country.
David Golembeski:
Consistency and standardization would absolutely help. And this is sort of IREC's bread and butter. In addition to publishing the Freeing the Grid report, we develop and publish our model interconnection procedures every few years and we last released those in 2023. So the model interconnection procedures showcases effective and proven interconnection practices that can help streamline a state's process. And so we enter state interconnection proceedings to advocate for the adoption of these national best practices. And so widespread adoption of these best practices would make a difference.
Delaware is on the cusp of experimenting with a pretty interesting concept. So back in 2009, the legislature passed a law that required them, the regulators, to establish statewide interconnection procedures based on IREC's model interconnection procedures. The model interconnection procedures have been the rule of law in Delaware. Now things have changed dramatically since that time. There's been the energy storage and that is sort of proliferated.
And so now there is a bill that is I think in front of the governor's desk at this point that is requiring the regulator to update their interconnection procedures 12 months after every time a new model interconnection procedures are adopted. That will ensure that the interconnection procedures are keeping pace with technology and with the market.
John Farrell:
That's amazing. And it actually funny enough then sort of gets back to that idea of building codes because I think states do have some laws in place around building codes that are requiring them to revisit with some regular cadence. And that would be amazing for states to have this sort of more automated in terms of updating because as you say, the technology is changing and not just the technology. I mean, we've talked a lot about storage. It's not just the technology that we're connecting to the grid. It's also the technology we have for managing the grid. I think about like virtual power plants and the way that they're able to coordinate lots of different resources together. I think utilities have similar platforms like that. You kind of alluded to that with the dynamic flexible interconnection that you would be able to send a signal to a producer and say, "Oh, you need to curtail at this point or you need to send the power to your battery at this point." There's going to be a lot more tools that utilities have and that project owners have to manage that interface than we've ever had before. And if our interconnection policies are 10 years old, it's not going to account for that.
When this report came out last time, it was around the time that there had been a really interesting study done in Michigan about DTE's grid and where they found that there was a disproportionately lacking investment in the distribution system in areas that were sort of historically low income or historically more populated by Black and brown folks. I'm kind of curious about the ways in which interconnection policy can help because in that case we're talking about really an infrastructure problem. These poles and like the wires and their capacity are just low, but are there ways that interconnection could actually make it sort of fairer and more equitable so that everybody can have options to go solar or be part of a solar and storage project?
David Golembeski:
Yeah. I mean, there's definitely ways that interconnection can become more equitable. In the Freeing the Grid, we have an energy equity criterion and New Mexico and Connecticut were the only states that receive credit for that criterion. And so how they did that is they both had a cost sharing mechanism for interconnection upgrades. So if a project was to be cited in a location that would increase energy access to low to moderate income or underserved communities, that upgrade would be shared across projects or rate payers. So that is a great way to increase access to those communities that might not otherwise get solar energy storage.
John Farrell:
So just to maybe play that out in the Michigan example, they might say, "Oh, our lower voltage distribution lines are insufficient to support this community solar project. We need to do an upgrade, but instead of enforcing the project to pay for it, which might be the project that is helping to serve those folks who have not traditionally had access, that cost gets socialized and that grid maybe is brought up to the same level that the grid has been in other places.
David Golembeski:
Yeah, exactly right.
John Farrell:
That's great. There's a couple different resources I've come across around interconnection policy. There's a federal small generator interconnection procedure and then IREC has their model interconnection procedures, which we've already talked about. What's the difference between these and is IREC still more up-to-date as it was the last time I looked?
David Golembeski:
Yeah. The small generator interconnection procedures is also known as SGIP. That was published by FERC, which is a Federal Energy Regulatory Commission back in 2005. And it's been updated once in 2023. And so the SGIP was initially vetted by a broad range of industry participants and it was meant for state regulators to use as a starting point for them to develop their own interconnection procedures and agreements for their state. The IREC model interconnection procedures was also first published in 2005, but it has been updated four times, including most recently in 2023. And we're expecting another update in the next year or two. The interconnection procedures were initially a combination of the SGIP, a combination of module procedures, which is basically a grouping of the mid-Atlantic states and some procedures that they created on interconnection as well as some progressive rules that were developed in New Jersey at the time.
But today we developed the model interconnection procedures based on best practices across the country. So at least one state has to have implemented some of these practices.
John Farrell:
Oh, that's interesting. So when you talk about model policies, this is not like out of thin air, you could do this. This is what states have already done that is having an impact on making interconnection more effective.
David Golembeski:
Yes.
John Farrell:
Alright. I'll just tell people to go to IREC.That's what I'm taking away from this state.
David Golembeski:
Yeah.
John Farrell:
What's one thing you hope people who read this report or who look at the Freeing the Grid website take away when they have come to take a look at this?
David Golembeski:
So while there's some states that I mentioned, New Jersey, Maine, Wisconsin, Oregon made ... A few states made meaningful improvements to their interconnection rules within the past three years. The vast majority did not make any improvement. And I mentioned 13 states have Fs. So they have substantial work ahead to ensure that solar and storage can connect to the grid in a fair and efficient manner. DER interconnection rules in the majority of states are really far behind the markets, the technologies, and the interconnection best practices, and though a lot of work is needed.
John Farrell:
I'm thinking about a lot of the listeners. We don't have just the average person listening to this podcast. It's a little too nerdy for that, but we definitely have people who are part of advocacy organizations who care about distributed energy, they care about climate change. They might care about specifically how do we address affordability by deploying clean energy resources. Maybe they already have a relationship with the legislator, maybe they're thinking about, "Hey, next year we're coming up with three ideas that we want to push forward to advocate for at the legislature." How should they use the Freeing the Grid report? And is it like show their legislator the map that say, Hey, look, our state's getting an F, this really stinks. Show them the model interconnection policies. Do you have anything or do you have anything that's maybe a little more layperson in terms of resource that they could use to say, Oh, okay, I need to understand how this has an impact. Where should they start, I guess is what I'm saying. If they see this problem as you have explained it and want to figure out how to solve it
David Golembeski:
We have a website called Freeing the Grid, and that is where our report is, where it's hosted and there's a webpage for each state and there is a fact sheet and that describes the state's letter grade and at a big picture where the state is deficient. So for example, data transparency and reporting, it'll show that there's a big red X in that area and so that is an area that is needed that needs improvement. Screening practices, it'll, again, will say a check mark or a big red X. And so that is a very simple form that could be presented to the layperson. If you want to get into more detail, we can publish a detailed report of how the state stacked up for each of the 56 criteria. And so that's something that can definitely be brought to the regulators, legislatures and can hopefully get a conversation started.
But I'll say that getting an interconnection work group started in your state and that would be hosted by the regulator, like going to your regulator and saying, "Hey, can we get a work group together?" And having the utility, the solar company, clean energy advocates, consumer advocates at the table to discuss the interconnection process, to share issues and concerns and to develop consensus on what needs to be made, that is huge. That can make a really big difference to get some cohesion and move the process towards improvement.
John Farrell:
I love that because it also feels very achievable.
David Golembeski:
Yes. Yeah. And I'd also say if you're a citizen or if you're part of a public interest organization or part of an energy organization, make your voice heard with consumer advocate agencies. So in DC, in Maryland, in a couple other states, they have Office of the People's Council, is what they're called. There's Citizens Utility Board is another, but sometimes they participate in these interconnection proceedings and they have a really powerful voice at that table. So if they're on board, if they're saying that it's important that solar is widespread, that the interconnection process is streamlined, that DERs are affordable, that can move the needle for the regulator and then support your local or your state public interest organization or clean energy nonprofits. Talk to them and tell them to participate in state interconnection proceedings because oftentimes in these proceedings it's just utility and maybe a developer or two.
And so having those public interest organizations, having those nonprofits there, it can, again, move the needle and bring more voices to the table to create some action.
John Farrell:
Well, Dave, thank you so much for taking the time to walk through this really important issue of interconnection and to share all of the knowledge that IREC has been putting together on this issue for many, many years. Before we sign off, just remind us, where can we go find this reading the grid report?
David Golembeski:
It's at www.freeingthegrid.org.
John Farrell:
Awesome. Dave, thank you so much for your work on this. And yeah, thank you again for taking the time to talk with me today. I really appreciate it.
David Golembeski:
Yeah, thanks, John.
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John Farrell:
Thank you so much for listening to this episode of Local Energy Rules with Dave Golembeski, senior program manager with IREC about getting effective and standardized rules to connect local solar and storage projects to the grid. On the show page, look for a link to the recent released Freeing the Grid Report and to IREC's model interconnection policies. We'll also have links to some related podcasts, including Local Energy Rules Episode 177 with Justin Baca and David Gall about trying to get the federal government to standardize collection of interconnection information from utility companies. We'll also have episode 135, which is about hosting capacity analyses with Yohi Sakai and episode 179 with Sky Stanfield about proactive grid planning and how it intersects with good interconnection policy. Finally, you can also check out two ILSR resources. First, you can cross-reference the freeing the grid report with our 2025 states of distributed solar report to see if good interconnection and robust distributed solar markets go together. Hint, they do. Also, we incorporate IREC's freeing the grid report into our annual community power scorecard so you can see it there as one of our 18 components evaluating how states can do more to promote local clean energy. Local Energy Rules is produced by myself and Ingrid Behrsin with editing provided by audio engineer Drew Birschbach. Tune back into local energy rules every two weeks to hear how we can take on concentrated power to transform the energy system. Until next time, keep your energy local and thanks for listening.
If you could somehow flip where we could get the federal government to require utilities to report all of this data, this would be a game changer.
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John Farrell:
How weird is it that utility companies who have their own interests in power generation and grid upgrades also control the means by which their competitors can get online? Fortunately, states can protect fair and open grid access by establishing standard grid interconnection rules. My guest today, David Golembeski, senior program manager with the Interstate Renewable Energy Council, or IREC, walks me through the key elements of effective and evidence-based grid rules from their recently released report, Freeing the Grid. I'm John Farrell, Director of the Energy Democracy Initiative at the Institute for Local Self-Reliance, and this is Local Energy Rules, a podcast about monopoly power, energy democracy, and how communities can take charge to transform the energy system.
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John Farrell:
Dave, welcome to Local Energy Rules.
David Golembeski:
Hi, John. Yeah, thanks for having me.
John Farrell:
My pleasure. Well, I love to start off by just asking all my guests what motivated you to get into the work that you do in clean energy or climate work. Is doing interconnection policy sort of what you wanted to do when you grew up?
David Golembeski:
Yeah, I have a unique avenue of getting into clean energy, but it might become more relevant in the coming years. So my dad, we used to work for a wind developer. He used to take me out to some projects in New York, in Pennsylvania, and some other areas post when they were operational, when they were under development. And I can remember one time there was a project that was under development and we went to visit the project because there was an environmental review happening and it was to determine if there was a risk to the Indiana bat, which is an endangered species in the region. And if the Indiana bat was found around this site, it could potentially shut down the project. And so there was this review. They hired this consulting firm to put up a bunch of netting around the forest in the woods around where the project was going to be cited.
And we went out with that team and we were checking out the nets to see what bats were being caught. And I thought, wow, this is really interesting. This is really cool. I was already interested in having climate change, understanding that and wanting to have a clean future and then seeing this development side was really interesting. And so from then on, I started an internship, some internships in college in clean energy on the public policy side and that's where I was pretty hooked.
John Farrell:
Well, I don't think anybody's ever used bats as the description for how they got into this before. So I love that story. Thank you for sharing that. Let's dive right into interconnection, but before we get into some of the weeds of it, which I definitely do want to get to, let's just do sort of like the 10,000 foot view. Why does interconnection matter for people who care about clean energy? What makes this issue so important to understand if we're looking at how we transition the grid to cleaner resources?
David Golembeski:
Interconnection I'd say is fundamental to DERs such as solar and storage. It's fundamental to them being affordable and widely adopted and overall a clean energy future. So out of any factor that influences the clean energy project development, the utility's interconnection process has one of, if not the biggest impacts on these things, on affordability, on wide adoption and on a clean energy future. And so the interconnection proces, and so the timelines, the costs, the technical requirements, when those are modern and well-designed, that can support faster and affordable DER integration. But on the other hand, if those processes are outdated or they're poorly designed, it can slow or even halt DER growth because these projects will face unnecessary obstacles, costs and delays.
John Farrell:
Thanks. I really appreciate that. I should mention for people who are ... Well, I think most people who listen to this podcast will know exactly what DER means, but it means distributed energy resources. And if you just substitute the word solar or battery storage in there every time you hear it, you'll understand the whole story of this podcast. But Dave, thank you so much for that kind of big picture view about the importance of getting these rules right. So interconnection sort of sets, I've described it before as like the rules of the road, because I think of it as like stoplights and speed limits and all this kind of stuff. So one of the things that I find so interesting about this is you have utility companies who are implementing interconnection. They're the ones that are managing the timelines that are quoting the prices to the connecting projects that are overseeing the technical requirements.
These utilities often have a conflict of interest with doing interconnection well, which is because in vertically integrated states where the utilities own power generation, they might be competing to provide power with the projects that are connecting to the grid. Even in states that don't have utilities owning power generation, those utilities might be otherwise building grid infrastructure like transformer upgrades that could be offset by distributed energy resources, solar storage, that kind of thing. What are the mechanisms that we have to hold utilities accountable to these policies? And if you could explain a little bit too for folks, what is the role specifically that like the state legislature or the public utilities commission plays in that enforcement?
David Golembeski:
So we think that the foundation to utility accountability is reporting and data transparency. And so the utilities would report and provide this data to the regulators, but unfortunately at the distribution level, there is a deficit of data of reporting and transparency for DER interconnection. So understanding if state interconnection rules are followed and creating accountability is really challenging. So for example, while many states have deadlines to complete, let's say the initial review step, like the utility doing a technical review and doing some screening practices to determine if it has any negative impacts onto the grid, that step is often, it might be 10 business days for a small project. So while a state might have that deadline, few states require utilities to report on their compliance with meeting that deadline. So we're completely in the dark if the utility is adhering to that 10 business day deadline, for example.
And it's not until it becomes an overwhelming problem where numerous customers are complaining about the same thing to the regulatory commission that there becomes a shared knowledge or understanding of the issue. So requiring utilities to report on their compliance with review deadlines to also post a public interconnection queue with all the projects that are under review or sharing detailed and itemized upgrade cost estimates with the customer, that all gives insights into utility performance and helps the public and regulators hold them these utilities accountable. And so it's really important for regulators to, if they have access to this data and this reporting, to continuously track the utilities compliance with the timelines and with the broader interconnection rules.
John Farrell:
One of the things I found really fascinating in the past few years was how not only do you have these rules within a state, so you want, as you said, like a public interconnection queue, you want detailed itemized costs, you want reporting from utilities to the public utilities commission. And as we'll talk about your report, obviously that differs from state to state because each state is its own fiefdom when it comes to setting these rules. I remember working on a petition to the Energy Information Administration, which interestingly polls distribution utilities across the country every year for a whole bunch of data and I'm told that historically they actually did collect data on interconnection and no longer do so. So I'm wondering if you could just talk a little bit about would it be useful if this information were collected not just at the state level but at the federal level so that you could actually compare state to state and what might we learn from that?
David Golembeski:
Oh yeah, that'd be a game changer, but unfortunately that can't be done at the federal level because the federal government does not have jurisdiction over distribution level interconnections. So FERC, the Federal Energy Regulatory Commission is an agency for the federal government and they regulate transmission level interconnection, so large scale solar projects and they have pretty robust data and reporting requirements for regional transmission operators. And so those are the entities that manage transmission level interconnection, those utility scale projects. And so yeah, there is a ton of data that is really useful and they are able to hold their feet to the fire, those RTO's feet to the fire when they're not complying with the rules. At the state level, it is up to, as you mentioned, it is completely fragmented and it is up to each state to determine what are sort of the reporting requirements, what are the data requirements.
But yeah, I mean, if you could somehow flip where we could get the federal government to require utilities to report all of this data, this would be a game changer.
John Farrell:
I should follow up with you. I did a podcast interview and I'll stick it in the show notes with David Gall. He's with the Solar and Storage Industries Institute, which is like a nonprofit research arm of the Solar Energy Industries Association. And he was working with me on this petition to the Energy Information Administration. I'm guessing that the data collection is voluntary to be truthful, but they do have these surveys that they send to distribution utilities and it's where their data comes like on electricity sales and revenue that is data that I use all the time. So I've been super curious about whether or not there is a hook in there. We don't have to dive into it more because I actually really want to talk about the freeing the grid report. So I remember last time when freeing the grid was released, you had one state that earned an A, it was New Mexico and it was really around the up recent revisions to their interconnection policy that incorporated more around battery storage, which is a new technology and it's kind of unique because of course it can both produce energy by sending or effectively produce energy by sending it back to the grid as well as use energy.
So it has some different factors than the traditional kinds of technologies like solar where you're only having to deal with energy being added to the grid. You also have states that get Fs. I'd love to start there because if I recall correctly, a state that gets an F can be a state that literally has no interconnection policy at all. Is that true? You have states that simply don't even try to govern this?
David Golembeski:
Yeah. So there are 13 states with no statewide interconnection policies. So that means that the interconnection process is fragmented across utilities within the state. So each utility within the state creates and uses their own set of interconnection procedures and oftentimes it means that the state's utility interconnection process, their timelines, their costs are a black box. There is no transparency, certainty or accountability for what those practices are.
John Farrell:
I can imagine that then the consequence of this is that these are states that don't have a lot of distributed energy resources because if I have a business trying to sell these devices to consumers and then having to go through that interconnection process, that sounds pretty laborious.
David Golembeski:
Yes. Yeah, that is exactly how it coincides. And so it's unclear. I think part of it is those states don't see, there's no market for distributed energy resources so there's no need to have sort of robust interconnection procedures. There's not really issues with a Q backlog, for example, to where it's a necessity. A lot of states are reactive in putting interconnection procedures and it's not until it becomes a problem are they putting it in place. And so the regulators don't feel any ... Their feet aren't to the fire to do anything on interconnection.
John Farrell:
I think of some states like Alabama where there are a multitude of things that their regulators aren't looking at. And I was like, I don't know if their feet are to the fire doing anything because they don't even do resource planning for investor-owned utilities. So it's not a surprise that they would also not be working on interconnection. I don't know if Alabama is one of your F states, but I can just imagine. Yes. Let's talk about the states that do this well. So who gets an A this time around? Is New Mexico still getting an A and had anybody managed to join them since last time?
David Golembeski:
No one has joined New Mexico, but there were some states that moved up to a B and there are a few states that are very close to an A. So Oregon moved from a D letter grade in 2023 to a B and they're a borderline B. They're pretty close to being an A. And so they did a lot of great work. They overhauled their screening practices and incorporated energy storage and export control provisions into their rules. New Jersey also had a big leap. They jumped from a D to a B. Maine is now a B jumping from a C and Wisconsin moved up one letter grade from a D to a C.
John Farrell:
Talk to me about some of those. You ran through them kind of quickly. What were some of those changes and how do they make the interconnection process work more effectively to get these resources connected to the grid? And really just to be clear too, I sometimes like to say maybe too shorthandedly that this is about removing red tape, but it's not necessarily about moving red tape because it's not about saying there's less regulation. It's actually being more efficient with how things are regulated, like updating screening criteria so that you're actually focused more on what actually matters for the grid as opposed to having sort of broad and cludgy requirements that might not actually be relevant in terms of screening projects for whether or not they pose a reliability issue or not, for example.
David Golembeski:
Yeah. So on screening practices that refers to a set of questions, if you will, technical questions that are able to quickly determine if a project clearly would not have an impact to the grid. And so if they pass, we can quickly connect them to the grid. And those screening questions are conservative in nature, but in many states they are, we view overly conservative and they can unnecessarily send projects from this quick initial review to a really lengthy, costly study process. So that is a process that can take three or four or five months. And so you're subjecting that project to that study process and it is costly and it's delaying when that project can interconnect. Oregon also incorporated provisions related to energy storage. So previously it was unclear if energy storage projects could use these state interconnection procedures. So it was kind of really up in the air and so now it provides much needed clarity that, hey, solar plus storage, standalone storage projects can connect using these procedures.
And then New Jersey, for example, they improved some siting tools. So there's what's known as a pre-application report. And so that gives customers typically larger projects insights into the grid conditions that's at various locations on the grid. And so that can help them rather than having to enter their project at this particular location, they can understand if that is a viable location before entering. And so they can save a lot of time and money without needing to enter the queue.
John Farrell:
If I'm correct too, there are other things outside of interconnection policies that can help with that, like hosting capacity maps. I can reference that in the show notes for folks who want to dig deeper. Now there's like a publicly published map. You can just go online and you can click around and be like, oh, where the lines are green, there's capacity to potentially add a project. Can you talk a little bit about, since the last time freeing the grid was put out in 2023, are there some new criteria? Are there things that you've sharpened in terms of your evaluation, new kind of rules that help the interconnection process be more evidence-based as opposed to, as you said, sort of being sort of overly conservative?
David Golembeski:
So we haven't added any new criteria since 2023. There hasn't been significant innovation or new practices since 2023. And for some background, our criteria, we have 56 criteria of what are viewed as best practices. So for example, I mentioned the initial review of a small project that is sometimes 10 or 15 days. So that is a criteria if a state meets that best practice. Since 2023, there hasn't been major evolution of these practices. It's mostly been states getting caught up on national best practices. So you see, I mentioned Oregon and New Jersey adopting energy storage provisions, pre-application reports practices. A lot of states were kind of getting caught up. I mentioned one trend that is worth mentioning is cost envelope or cost cap policies. So New Jersey and DC both implemented these policies to combat widely varying utility cost estimates for distribution upgrades. So when a project moves through the interconnection review process and the utility comes back and says, "Hey, your project is going to ... If we connect it now, it might cause some adverse impacts to the grid." So we need to do a distribution upgrade so those impacts don't happen.
And the utility will do the study and they will come back with an initial cost estimate and let's say that estimate is $500,000 and the customer's like, "Okay, we can handle $500,000 for this distribution upgrade. Let's move forward with the project." And then the utility builds that upgrade and maybe what we're seeing is 90, 200 a year, multiple years after the fact, the utility comes up with a true up bill. So what is the final cost of that distribution upgrade? And now they say it's not $500,000, it's $3 million. And the customer, the developer is, "This project is no longer viable and no longer pencils out." They would have never built a project in the first place had they known that that upgrade was going to cost $3 million and it's disastrous for the developer. In reality, they can go bankrupt because of these. And so New Jersey implemented a 50% cost cap, DC implemented a 25% cost cap.
So meaning that the difference between the initial estimate and the final estimate cannot increase more than 25% in DC and no more than 50% in New Jersey. So that creates some certainty for the developer knowing that, hey, it's not going to be exorbitant costs to where it's disastrous for our bottom line.
John Farrell:
I'm super curious about how utilities can be so far off because as far as I know, maintaining and upgrading the distribution grid is basically their job all the time. So if they're this bad at estimating costs for these individual projects, what does that say I guess more broadly about how much we're paying to maintain the grid? That seems really odd. Have you done any kind of deeper dive into how utilities get this so wrong or is there any plausible reasonable explanation of why these estimates could be so far off from the initial to the final?
David Golembeski:
Yeah, I think that it's reasonable to expect that there is going to be some difference between the initial estimate, but as you mentioned, what we're seeing is it is wildly different. It is 300, 400% increases in the cost estimate and some of it has to do with the equipment that is available. Some of the equipment might not be available. Sometimes there is inflation on that equipment. The costs are more ... So that's certainly one factor, but again, for it to be such an increase is perplexing.
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John Farrell:
We're going to take a short break. When we come back, I ask Dave about flexible interconnection, about IREC's model policies, and what resources IREC provides for folks that will want to take action to improve their state's market for local clean energy. You're listening to a Local Energy Rules podcast with Dave Golembeski, senior program manager with IREC. Hey, thanks for listening to Local Energy Rules. We're so glad you're here. If you like what you've heard, please help other folks find us by giving the show a rating and review on Apple Podcasts or Spotify, five stars if you think we've earned it. As a bonus, I'll gladly read your review aloud on the show if it includes an energy related joke or pun. Now back to the program.
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John Farrell:
I was wondering if you could talk a little bit about flexible interconnection, because I was just thinking about, this is coming up with data centers, which obviously are giant loads and not potentially not covered. I mean, those are loads not covered under the interconnection procedures, but this idea behind trying to accommodate large new facilities on the grid and what people are saying is, "Okay, if data centers could be flexible, which is to say they could change the amount of energy they need to use, they might be able to avoid some of the grid upgrade costs that would otherwise be incurred." I've also heard that I actually was familiar with the term previously because of interconnection of generation like solar where the idea was, "Oh, maybe it's only a few times a year that the generation from the solar project actually would trip some sort of voltage thing or whatever, what have you on the distribution grid, maybe that project could just curtail or maybe the project has storage and they guarantee, oh, it's a 50 kilowatt project, but we'll never export more than 48 kilowatts because we'll just dump it in the battery when we get to that amount." Can you talk a little bit about how that could help address this problem as of upgrades?
Obviously it won't change if the utility is told this is the problem and whatnot, but I guess in the past, my understanding is utilities haven't necessarily been interested in trying to sort of play let's make a deal on how this project could happen and more so have been oriented around, here's a formulaic, this is the upgrade cost to connect your project. We don't really care what accommodations you could make. So could you talk a little bit about how flexible interconnection might work and to what degree it was included in the freeing the grid report?
David Golembeski:
Yeah. So it's not incorporated in freeing the grid because it is such a new and emerging practice, but it is something that IREC and myself are actively pushing in states throughout the country. And so there's two major forms of flexible interconnection. There is a static schedule based flexible interconnection and then there is a more dynamic flexible interconnection. And so the static based flexible interconnection is a developer will submit an operating a profile or schedule of what the output of their project will be over the course of the next year, over the course of the life of the project. And so what the developer can do is they can, if there is robust data, they can see when there is going to be grid constraints at different times throughout the year and they can reduce their project's output when those constraints occur and they can avoid grid upgrades and they can avoid the cost.
Grid upgrades can take many months, many years so they can avoid those grid upgrades and it can connect in the near term. And so dynamic is where the utility is very similar, but the utility has a centralized communications device and it communicates with the solar project, the energy storage project and in real time that device will curtail that project when a constraint is happening. And again, this is a great way to avoid grid constraints, avoid grid upgrades and get the project connected much faster.
John Farrell:
And it kind of goes without saying perhaps but is worth saying that either of these practices with flexible interconnection really relies on the utility having some robust and accurate data about its own system, which is hilariously not necessarily very common.
David Golembeski:
No, not at all. And there's some states that are exploring it right now. I mean, California that has always been a leader in solar energy storage, they're experimenting with some flexible interconnection practices. ComEd in Illinois is another one that is focusing on the dynamic side of flexible interconnection, but we're hoping in the next few years, a lot more utilities and states adopt flexible interconnection.
John Farrell:
Could you give me a sense, I want to paint this picture a litle bit more fully if we could, and I know I'm putting you on the spot with this question, but contrasting like a California, so they have over the years developed hosting capacity or I think they call it integrated capacity analysis. Other states have similar, like they're requiring utilities to provide monthly data on the capacity within their distribution system to host projects. Contrast that, maybe we can pick on Alabama again or some other state, like what is the limit of what utilities know about their own distribution system in some of these states where there hasn't been a lot of DER development? I guess can you give us a sense of like what they don't know about their own system in some of these places and how that is interplaying with the challenge of then getting good interconnection policy?
David Golembeski:
A majority of states, I'd say they probably have this data, but they just are not compelled or not interested in sharing any of this data, which is definitely a problem. I mean, every time a project interconnects, certainly they are definitely tracking that to maintain safety and reliability, they need to know where these projects are located to do all these types of analysis to determine if they're maintaining safety.
John Farrell:
I wanted to go a little bit bigger scale for a minute. So you mentioned that there's 13 states who have no state policy whatsoever. So interconnection rules are essentially set by each individual utility. Now you also have, as we've talked about, the variation state to state. There is interestingly right now a big campaign around solar permitting costs, which are... solar permitting of course is handled by the municipal jurisdictions cities, counties, townships and whatnot, but there's this big campaign to get more consistency at least within states. So it's a focus on state policy that would make consistent within a state what happens with solar permitting. Would it be helpful to have some sort of national campaign like that is that was talking about interconnection as well? And I guess a follow-up to that, I'm just thinking about like building energy codes. There is an independent body that releases a sort of like standardized code every few years and then when states want to do something about it, they basically say, "We're adopting the 2021 code or the 2023 code," and they'll do tweaks to it. I'm not saying that they don't change it at all, would that be something that would possibly work in doing this? So yeah, what would be helpful in getting from the really candid and thoughtful analysis that IREC is providing here about where we are to actually getting some real momentum to changing this and making our interconnection policies more sane across the country.
David Golembeski:
Consistency and standardization would absolutely help. And this is sort of IREC's bread and butter. In addition to publishing the Freeing the Grid report, we develop and publish our model interconnection procedures every few years and we last released those in 2023. So the model interconnection procedures showcases effective and proven interconnection practices that can help streamline a state's process. And so we enter state interconnection proceedings to advocate for the adoption of these national best practices. And so widespread adoption of these best practices would make a difference.
Delaware is on the cusp of experimenting with a pretty interesting concept. So back in 2009, the legislature passed a law that required them, the regulators, to establish statewide interconnection procedures based on IREC's model interconnection procedures. The model interconnection procedures have been the rule of law in Delaware. Now things have changed dramatically since that time. There's been the energy storage and that is sort of proliferated.
And so now there is a bill that is I think in front of the governor's desk at this point that is requiring the regulator to update their interconnection procedures 12 months after every time a new model interconnection procedures are adopted. That will ensure that the interconnection procedures are keeping pace with technology and with the market.
John Farrell:
That's amazing. And it actually funny enough then sort of gets back to that idea of building codes because I think states do have some laws in place around building codes that are requiring them to revisit with some regular cadence. And that would be amazing for states to have this sort of more automated in terms of updating because as you say, the technology is changing and not just the technology. I mean, we've talked a lot about storage. It's not just the technology that we're connecting to the grid. It's also the technology we have for managing the grid. I think about like virtual power plants and the way that they're able to coordinate lots of different resources together. I think utilities have similar platforms like that. You kind of alluded to that with the dynamic flexible interconnection that you would be able to send a signal to a producer and say, "Oh, you need to curtail at this point or you need to send the power to your battery at this point." There's going to be a lot more tools that utilities have and that project owners have to manage that interface than we've ever had before. And if our interconnection policies are 10 years old, it's not going to account for that.
When this report came out last time, it was around the time that there had been a really interesting study done in Michigan about DTE's grid and where they found that there was a disproportionately lacking investment in the distribution system in areas that were sort of historically low income or historically more populated by Black and brown folks. I'm kind of curious about the ways in which interconnection policy can help because in that case we're talking about really an infrastructure problem. These poles and like the wires and their capacity are just low, but are there ways that interconnection could actually make it sort of fairer and more equitable so that everybody can have options to go solar or be part of a solar and storage project?
David Golembeski:
Yeah. I mean, there's definitely ways that interconnection can become more equitable. In the Freeing the Grid, we have an energy equity criterion and New Mexico and Connecticut were the only states that receive credit for that criterion. And so how they did that is they both had a cost sharing mechanism for interconnection upgrades. So if a project was to be cited in a location that would increase energy access to low to moderate income or underserved communities, that upgrade would be shared across projects or rate payers. So that is a great way to increase access to those communities that might not otherwise get solar energy storage.
John Farrell:
So just to maybe play that out in the Michigan example, they might say, "Oh, our lower voltage distribution lines are insufficient to support this community solar project. We need to do an upgrade, but instead of enforcing the project to pay for it, which might be the project that is helping to serve those folks who have not traditionally had access, that cost gets socialized and that grid maybe is brought up to the same level that the grid has been in other places.
David Golembeski:
Yeah, exactly right.
John Farrell:
That's great. There's a couple different resources I've come across around interconnection policy. There's a federal small generator interconnection procedure and then IREC has their model interconnection procedures, which we've already talked about. What's the difference between these and is IREC still more up-to-date as it was the last time I looked?
David Golembeski:
Yeah. The small generator interconnection procedures is also known as SGIP. That was published by FERC, which is a Federal Energy Regulatory Commission back in 2005. And it's been updated once in 2023. And so the SGIP was initially vetted by a broad range of industry participants and it was meant for state regulators to use as a starting point for them to develop their own interconnection procedures and agreements for their state. The IREC model interconnection procedures was also first published in 2005, but it has been updated four times, including most recently in 2023. And we're expecting another update in the next year or two. The interconnection procedures were initially a combination of the SGIP, a combination of module procedures, which is basically a grouping of the mid-Atlantic states and some procedures that they created on interconnection as well as some progressive rules that were developed in New Jersey at the time.
But today we developed the model interconnection procedures based on best practices across the country. So at least one state has to have implemented some of these practices.
John Farrell:
Oh, that's interesting. So when you talk about model policies, this is not like out of thin air, you could do this. This is what states have already done that is having an impact on making interconnection more effective.
David Golembeski:
Yes.
John Farrell:
Alright. I'll just tell people to go to IREC.That's what I'm taking away from this state.
David Golembeski:
Yeah.
John Farrell:
What's one thing you hope people who read this report or who look at the Freeing the Grid website take away when they have come to take a look at this?
David Golembeski:
So while there's some states that I mentioned, New Jersey, Maine, Wisconsin, Oregon made ... A few states made meaningful improvements to their interconnection rules within the past three years. The vast majority did not make any improvement. And I mentioned 13 states have Fs. So they have substantial work ahead to ensure that solar and storage can connect to the grid in a fair and efficient manner. DER interconnection rules in the majority of states are really far behind the markets, the technologies, and the interconnection best practices, and though a lot of work is needed.
John Farrell:
I'm thinking about a lot of the listeners. We don't have just the average person listening to this podcast. It's a little too nerdy for that, but we definitely have people who are part of advocacy organizations who care about distributed energy, they care about climate change. They might care about specifically how do we address affordability by deploying clean energy resources. Maybe they already have a relationship with the legislator, maybe they're thinking about, "Hey, next year we're coming up with three ideas that we want to push forward to advocate for at the legislature." How should they use the Freeing the Grid report? And is it like show their legislator the map that say, Hey, look, our state's getting an F, this really stinks. Show them the model interconnection policies. Do you have anything or do you have anything that's maybe a little more layperson in terms of resource that they could use to say, Oh, okay, I need to understand how this has an impact. Where should they start, I guess is what I'm saying. If they see this problem as you have explained it and want to figure out how to solve it
David Golembeski:
We have a website called Freeing the Grid, and that is where our report is, where it's hosted and there's a webpage for each state and there is a fact sheet and that describes the state's letter grade and at a big picture where the state is deficient. So for example, data transparency and reporting, it'll show that there's a big red X in that area and so that is an area that is needed that needs improvement. Screening practices, it'll, again, will say a check mark or a big red X. And so that is a very simple form that could be presented to the layperson. If you want to get into more detail, we can publish a detailed report of how the state stacked up for each of the 56 criteria. And so that's something that can definitely be brought to the regulators, legislatures and can hopefully get a conversation started.
But I'll say that getting an interconnection work group started in your state and that would be hosted by the regulator, like going to your regulator and saying, "Hey, can we get a work group together?" And having the utility, the solar company, clean energy advocates, consumer advocates at the table to discuss the interconnection process, to share issues and concerns and to develop consensus on what needs to be made, that is huge. That can make a really big difference to get some cohesion and move the process towards improvement.
John Farrell:
I love that because it also feels very achievable.
David Golembeski:
Yes. Yeah. And I'd also say if you're a citizen or if you're part of a public interest organization or part of an energy organization, make your voice heard with consumer advocate agencies. So in DC, in Maryland, in a couple other states, they have Office of the People's Council, is what they're called. There's Citizens Utility Board is another, but sometimes they participate in these interconnection proceedings and they have a really powerful voice at that table. So if they're on board, if they're saying that it's important that solar is widespread, that the interconnection process is streamlined, that DERs are affordable, that can move the needle for the regulator and then support your local or your state public interest organization or clean energy nonprofits. Talk to them and tell them to participate in state interconnection proceedings because oftentimes in these proceedings it's just utility and maybe a developer or two.
And so having those public interest organizations, having those nonprofits there, it can, again, move the needle and bring more voices to the table to create some action.
John Farrell:
Well, Dave, thank you so much for taking the time to walk through this really important issue of interconnection and to share all of the knowledge that IREC has been putting together on this issue for many, many years. Before we sign off, just remind us, where can we go find this reading the grid report?
David Golembeski:
It's at www.freeingthegrid.org.
John Farrell:
Awesome. Dave, thank you so much for your work on this. And yeah, thank you again for taking the time to talk with me today. I really appreciate it.
David Golembeski:
Yeah, thanks, John.
*****
John Farrell:
Thank you so much for listening to this episode of Local Energy Rules with Dave Golembeski, senior program manager with IREC about getting effective and standardized rules to connect local solar and storage projects to the grid. On the show page, look for a link to the recent released Freeing the Grid Report and to IREC's model interconnection policies. We'll also have links to some related podcasts, including Local Energy Rules Episode 177 with Justin Baca and David Gall about trying to get the federal government to standardize collection of interconnection information from utility companies. We'll also have episode 135, which is about hosting capacity analyses with Yohi Sakai and episode 179 with Sky Stanfield about proactive grid planning and how it intersects with good interconnection policy. Finally, you can also check out two ILSR resources. First, you can cross-reference the freeing the grid report with our 2025 states of distributed solar report to see if good interconnection and robust distributed solar markets go together. Hint, they do. Also, we incorporate IREC's freeing the grid report into our annual community power scorecard so you can see it there as one of our 18 components evaluating how states can do more to promote local clean energy. Local Energy Rules is produced by myself and Ingrid Behrsin with editing provided by audio engineer Drew Birschbach. Tune back into local energy rules every two weeks to hear how we can take on concentrated power to transform the energy system. Until next time, keep your energy local and thanks for listening.
