FERC Approves Changes to CAISO Interconnection Procedures; Next Queue Cluster Application Window Not Scheduled to Open Until 2023

On September 24, 2021, the Federal Energy Regulatory Commission issued an order (176 FERC ¶ 61,207) approving tariff revisions to amend the California ISO’s (CAISO) interconnection procedures for its current queue cluster (Cluster 14).  The CAISO had requested changes to its interconnection procedures due to the massive increase in the number of interconnection requests it received this year—373 interconnection requests representing 150,000 megawatts of generating capacity, as compared to the 155 requests in 2020.  Prior to 2021, the average number of interconnection requests that the CAISO received each year over the past 10 years was 113.  The volume of interconnection requests in 2020 caused the CAISO to issue a market notice to delay the publication of Phase I interconnection study results by one month, pursuant to its tariff authority to extend the timing for providing study results under Sections 6.6 and 8.5 of its Generator Interconnection and Deliverability Allocation Procedures (GIDAP, Tariff Appendix DD).

Rather than rely on these tariff provisions to extend the study timelines for Cluster 14, however, the CAISO sought approval to establish extensions for various interconnection deadlines early in the process, to provide generators with advance notice of the timing for Cluster 14.  Per the approved tariff revisions, Cluster 14 deadlines will be extended as follows:

Prior to these tariff revisions, an interconnection customer’s maximum cost responsibility was the lesser of either the Phase I or the Phase II study cost estimates.  Therefore, the Phase I study cost estimate caps an interconnection customer’s cost responsibility.  Interconnection financial security (IFS) postings are due after the Phase I study (15% of the interconnection customer’s allocated cost), after the Phase II study (30% of allocated costs) and upon commencement of construction (100% of allocated costs).  If an interconnection customer withdraws after the first posting but before the final posting, it is refunded 50% of its IFS posting.  Once the final posting is made, the IFS is not refundable upon withdrawal.

However, because the CAISO was concerned that there was a greater likelihood that Phase II costs would be greater for Cluster 14 due to the large number of potential withdrawals from the queue after Phase I, the revisions to Cluster 14 interconnection procedures provide that the Phase I cost estimates are advisory only, and do not cap an interconnection customer’s cost responsibility.  However, if the Phase II cost estimate exceeds the Phase I cost estimate by 25% or more, then an interconnection customer will be fully refunded its initial IFS posting if it withdraws prior to the due date of the second IFS posting.  If the Phase II study extends the longest-duration reliability network upgrade by one year or more, the interconnection customer’s first IFS posting is also fully refundable prior to the second posting.

Due to the volume of Cluster 14 interconnection requests, the CAISO will not be able to begin studying Cluster 15 in April 2023, when the queue cluster application window normally opens.  The next queue cluster application window will open April 2023 and will be subject to the CAISO’s normal interconnection procedures, as such procedures may be revised pursuant to its stakeholder processes prior to that date.  The CAISO recently launched its Interconnection Process Enhancements 2021 initiative and has scheduled a public stakeholder workshop webinar on October 19, 2021.

If there are a large number of withdrawals from Cluster 14 early in the process, such that the CAISO can accept queue cluster applications in 2022, it will issue a market notice to that effect, pursuant to its tariff.