Episode 07: Interconnection Policies - The Electric Grid's "Rules of the Road"

Speaker A: Foreign.

Speaker B: Hello and welcome to the Energy Optimist. I'm your host, Gwen Brown, Vice President of Communications with the Interstate Renewable Energy Council or Iraq, an independent nonprofit that's been building the foundation for the rapid adoption of clean energy and energy efficiency for more than 40 years. Each episode we tackle a thorny energy policy challenge in bite sized interviews with leading experts. If you're totally new to energy policy, we'll demystify it for you, and if you're a seasoned practitioner, we'll hopefully leave you with renewed optimism to keep doing the work to improve our energy system, because hope is the fuel for change. In the Energy Optimist episodes we've released so far, we've begun to chart the landscape of clean energy in America, from how energy is regulated to the structure of the electrical grid and the differences between the distribution and transmission systems. We've explored the concept of energy equity, and we've also started to dig into how our energy system is changing in recent years from a centralized system to a decentralized one as, uh, renewable energy systems like rooftop solar energy and energy storage have become more prevalent and affordable. Today, we're going to continue that trajectory and explore a topic that is near and dear to IRAC's heart and is a central focus of the work that our regulatory team does. Interconnection at irec, we often refer to interconnection policies as the rules of the road for the electric grid. They govern how systems that produce electricity are permitted to connect to the grid. And since the vast majority of renewable energy systems are connected to the grid rather than being designed as isolated, uh, off grid systems, these policies are a critical factor in how efficiently and affordably clean energy can be developed. Even though interconnection remains relatively behind the scenes in terms of public awareness of these policies, today we'll dig into what happens in the interconnection process, some of the common pitfalls, and what defines effective interconnection policies. IREC's regulatory team assists states across the country in adopting the next generation of interconnection best practices to ensure that connecting to the grid is efficient, cost effective and fair. With that in mind, it is fitting that I'm joined today by Vaughn Woodruff, vice president of IREC's regulatory program. Von joined the IRAC team earlier this year to lead our state and national efforts to streamline the interconnection of distributed energy resources and bolster grid modernization to achieve a 100% clean energy future. Prior to joining Iraq, Vaughn founded and led a Maine based employee owned B Corporation that specialized in the design and installation of distributed energy resources including solar energy storage, EV charging equipment and heat pumps. He also served as vice president of workforce development and interconnection strategy for another multi state employee owned B Corp working in the same space.

Speaker A: Vaughn has extensive experience with interconnection and

Speaker B: clean energy regulatory policies. He currently serves as the chair of the Maine State Workforce Board and he

Speaker A: has also served on a number of

Speaker B: technical committees including for the North American

Speaker A: Board of Certified Energy Practitioners or NABSUP, and the International association of Plumbing and Mechanical Officials or iapmo, among others.

Speaker B: Welcome Vaughn.

Speaker A: It's great to have you here today.

Speaker C: Great to be here Gwen. Thanks for having me.

Speaker A: Can you talk a little bit about your experience with Interconnection and how you've gotten to where you are today?

Speaker C: Yeah, be happy to. So I got into renewable energy about 16 years ago, uh, after working in sustainable housing construction and uh, education and got a job working with a company doing solar water heating and from there ended up starting a company and seeing that grow, incorporate solar photovoltaics and energy storage and heat pumps and EV charging and eventually ended up focusing in leadership for a company that we merged with on both workforce development, um, and interconnection strategy. It was an interesting transition for me. I had, uh, gotten into renewable energy because of the hands on components of it, but quickly found out how big policy matters within renewable energy. I ended up serving as chair of an industry trade group in Maine that took me to the legislature and to the Public Utilities Commission here and quickly learned that what happens in those rooms matters as much to where we go in terms of implementation of renewable energy, perhaps even more so than the work we're doing out on roofs and in the fields and electrifying transportation and all of that. And so that's what got me here after a number of years doing that work and being able to collaborate with IREC in that realm. Really, really excited to be able to join this team and help impact cross country.

Speaker A: Fantastic. Thanks so much for kind of walking us through your journey so far. So for those that might not be familiar with interconnection, can you explain in simple terms like, you know, what is this process trying to do and why is this a step that every project needs to go through, um, on the grid.

Speaker C: So let's say you or I wanted to connect solar batteries to our home and then connect it to the grid so that we could potentially export additional energy if we're generating more than we need. Interconnection is the process by which we first get permission from the utility to be able to install that and then verify with the utility that it is safe and reliable to operate on the grid. That's the utility's job. They're there to ensure that there's safety and reliability. And the interconnection process serves to make sure that the things that you and I and other customers might connect to the electrical grid doesn't have adverse impacts on other users of that grid.

Speaker A: Can you kick us off with kind of an overview of what is interconnection for those who might not be familiar with it and why this is so important?

Speaker C: Certainly, as I mentioned before, I got started in renewable energy when it was a, uh, heating and air conditioning trade. Never expected that I would have to learn as much about our electrical grid as I, uh, ended up needing to. And for me there was a big transition there, right, like understanding what transmission is versus what distribution is, what all this equipment is that is out on our grid. Because I think most Americans are like me. And it's almost like the air we breathe, we don't necessarily notice it, it's out there. We know there's poles and wires, but how it all works is a bit of a mystery. And it's a bit of a mystery to folks who are involved in it as well, especially those seeking to interconnect. If we look at the grid transmission, I've always thought of it as kind of the superhighways runs for long distances at high voltages. And the distribution system is really like the avenues and the streets and the roads after you get off the off ramp of transmission and the off ramp between transmission and distribution are our substations. And you know, there are a lot of very large projects that may interconnect at transmission, meaning they tie directly into those long superhighways of our electrical system. And then a lot of the work that we focus on here at IREC is on the distribution system. So these are rooftop solar projects or battery projects, or these could be community solar projects or things like electric vehicle charging. And the reason that it's so important is that we live in a world that's largely constituted by monopoly utilities. And so we've given them the franchise to be able to manage, build, repair those poles and wires, especially on the distribution side. And they are charged with making sure that everything that's done there is done with safety in mind, with a reliability in mind, with cost effectiveness in mind. And for those of us who live in utility districts that are run by those investor owned utilities that are monopolies. We depend upon our, uh, regulator, whether it's a Public Service Commission or a Public Utility Commission, to make sure that those utilities have a set of rules by which to make sure they're operating with safety, reliability and cost effectiveness in mind and that they're operating by those rules. And so interconnection is this kind of hidden place when we look at climate solutions. It's this hidden place that's very critical to whether we're able to access the grid and integrate the technologies that we're needing to in order to address the climate challenges that we're seeing. And how those are regulated can be a very complicated and archaic structure that was set up for a different time when our grid was really dealing with large generators and we as customers just consumed electricity. We were never thought to potentially put things back onto the grid. And so this is part of the reason why I got into regulatory policy first, was running into the challenges where the process in order to interconnect projects wasn't necessarily streamlined and working as it needs to for customers and legislators, Policymakers, folks who are looking at how we address climate change don't necessarily understand that this is a critical piece of it because it can be mundane, it's very bureaucratic, it is very procedural, but is absolutely critical to our ability to deploy distributed energy resources.

Speaker A: Awesome. Um, thank you. And from a practical perspective, can you kind of walk us through what's actually involved in the interconnection process? Like, what are the steps that utilities and other actors need to go through?

Speaker C: So the steps for interconnection will vary depending on the type of customer, type of project. That said, they all start with an interconnection application. So whether it's a small residential project or a very large multi megawatt project that takes up tens or hundreds of acres, uh, they all start with an application that tells the utility, who's the customer, where's the project going to be located on their grid, what's being connected, uh, and then other details depending upon the procedures for that state. After that, it gets a little bit varied depending on the customer. Smaller projects that are less likely to have an adverse impact on the grid go through a screening process or a review process that is there just to do a cursory check that that project will indeed not have adverse impacts on the grid. At the other end of the scale is, uh, larger projects that very clearly could have or will have impacts on the grid that need to go through very detailed study processes and engineering reviews because we can't Just take for certain that they will not have an adverse impact. And so what the utility is tasked with doing is figuring out, we've received this application. Is this a project that we can just screen, or is this a project that we need to study? And the interconnection rules, either held by the utility or by their regulator, which is the commission, help to define what that process specifically looks like.

Speaker A: And, um, if a utility does discover during the interconnection study process that a project could have adverse impacts on the grid, what happens next?

Speaker C: That's a great question. Sometimes it may be as simple as replacing a piece of equipment. So, for instance, let's just say it's a residential project, and I put in a big rooftop solar project for my house. It could at times export more power to the grid than I was ever expected to receive from the grid at one time. And it may be that just the transformer, which is the thing that looks like a can up on a pole that serves my house, is undersized. And so it may just mean that that piece of equipment needs to be replaced. It could mean for other projects that there needs to be an entire rebuild of a substation or miles of reconductoring of rerunning wire from the substation to the location of the site. Thus, part of the detailed study process that happens for those larger projects is not only determining is this going to be problematic? But then if it is going to be problematic, what are the remedies that are needed in order to do it, and estimates of how much that will cost so that the interconnection customer can make a reasonable determination as to whether the project's going to be feasible or not.

Speaker A: Thanks. So you've talked a little bit about interconnection being this kind of hidden issue that has big impacts on our clean energy transition. What are some of the pitfalls that can arise in the interconnection process for clean energy that might make it more challenging for the clean energy transition to happen?

Speaker C: So one of the biggest challenges that a lot of projects face are delays, Del. And this can be for a number of reasons. What we're seeing is exponential growth of demand for these technologies, that utilities that have historically had a really flat business model with not a ton of growth are finding the need to scale up quickly to meet that demand. And that scale may be workforce, it may be the efficiency of the processes that they use. I mean, there are some utilities that I've interacted with that within the last few years were still mailing out applications via Email, and they weren't even fillable PDFs, right. So that doesn't scale. And so some of those delays are due to just administrative processes, the handing of information between different departments within a utility. Others are due to construction. So if some of the upgrades that we mentioned before need to be installed, so the case of upgrading a substation that doesn't just happen overnight, there's a lot of engineering and planning that need to take place. Uh, there's procurement of equipment, which, as we've seen with supply chains that have affected other industries and other markets, that's become a, uh, significant factor in terms of some of these delays. And then others are just due to a lack of good and clear interconnection procedures. So that creates uncertainty. You know, you look at a rule, the utility interprets it one way, the customer or the developer is looking at it another way, and that creates uncertainty. That sometimes requires the regulator to get involved. And regulatory processes can take quite a bit of time. And you know, we've seen over the years if technologies have changed, it's really important for states to stay on top of updating their rules, because rules that were originally imagined for, you know, things like solar, even if they updated to incorporate some of those specifics as batteries come online, they're a, uh, different technology that requires different operating considerations. And therefore it's really important that states stay on top of it. And there's not a lot of incentive to do it until problems arise. And then the customers are often the ones that are feeling those delays.

Speaker A: What about on the topic of, uh, like, if equipment needs to be upgraded, are there any challenges there? And I guess if so, what do those look like?

Speaker C: Yeah, grid upgrades can, uh, be an enormous challenge. One of them has to do with what actually needs to be upgraded. But I think more importantly it's who pays for it. What we're seeking to do with ideas like beneficial electrification, where instead of heating our homes and buildings with gas, um, or other fossil fuels, moving it to electrification that we can then offset with renewable energy, or transitioning our transportation sector from internal combustion engines to electric vehicles, that transition is one that our grid is not ready for. Our grid is old. Our, uh, grid was not designed for things to be pushing power onto it from a variety of different places. And therefore we need billions in states and trillions across the country of, uh, dollars of investment in the infrastructure to be able to accommodate the types of upgrades that just a single customer, it may run into a barrier on. Right. Like we've seen occasions where just a Customer putting in a small rooftop system triggers the need for the utility to upgrade some equipment that may exceed the cost of the solar array itself. And in a lot of states, they go by what's called a cost causer principle, which is, if my rooftop system is the one that triggers the need for the upgrade that I mentioned, that costs more than the system I was intending to purchase, then it would be on me to pay for it. Well, I'm not going to pay for it, likely, if it costs as much as my project would itself and doubles the cost. And thus, as we take a look at our climate priorities and the deficiencies in our grid and recognize that we need to pay for it, a lot of states are required. Really grappling with right now. How do we invest in our grid in a way that enables us to interconnect more distributed energy resources to the grid? Do it in a way that's equitable for the customer who's seeking to interconnect it? Like a utility could just say, well, you know what, Vaughn or Gwen, you don't need to pay for the upgrade. We're just going to have all the rest of our ratepayers pay for it, because that's how a lot of upgrades that we make to the grid are paid for otherwise. But it's really important for us to think about this from an equitability standpoint, too. If I'm trying to put in a system that's way huge, requires a ton of upgrades, is it fair for other customers to pay for it? It may be because there's been underinvestment in the grid where I live, or it may not be because I'm trying to do something that really pushes the edge of what's responsible.

Speaker A: Interesting. Thank you so much for walking us through that. You talked a little bit about this broader context of increasing, uh, electrification, and it sounds like in some cases there may be a benefit to upgrading sections of the grid kind of before these issues arise. And I'm wondering if you can talk a little bit about the lay of the land there in terms of proactive grid upgrades and where that fits in.

Speaker C: Certainly. So throughout the history of our utilities that have been regulated, there's been this idea of planning, right. Whether it was to grow the grid initially or when we saw towns that were growing that needed more infrastructure. Uh, utilities have historically had a distribution planning process that's gone on that happens in concert with a public utilities commission. What is shifting dramatically is that we're seeing much larger load going onto the grid. At a pace that hasn't been seen before, and generation going on to the grid at a pace that hasn't been seen before. So what's having to happen is for the processes that existed for a long time to reconsider their design in order to make sure that they're taking into account. Well, my state has a plan to move to 100% clean electricity by the year 2035. Say, what are we going to have to do over the next 10 years in order to get there? Because you can't just upgrade an entire distribution circuit in two years. It's going to take some time. And thus the idea of having proactive upgrades and what's called integrated distribution planning. Right. So that we're not just taking into account the very narrow set of assumptions that we had when we did grid planning in the past, but starting to take into account how much generation is going to be on the grid, how many EVs are we going to be charging, what's going to be the demand from electrifying all of our buildings and making sure that that is integrated into the planning with the utility. And then also getting back to talking about distribution and transmission, making sure that distribution planners and transmission planners are also talking so that we can make sure that the money that we are spending is done effectively and efficiently and where it's needed, and that costs are distributed in a way that provides benefit to all ratepayers.

Speaker A: Awesome. Thank you for walking us through that. Turning our attention back to interconnection specifically, we've talked about some of the issues that can arise and why it's important for regulators to get the rules right and also that the rules actually be implemented well by utilities. If we wanted to leave our listeners with a really, uh, quick understanding of what characterizes good interconnection processes, what do you think would be the key characteristics of a good interconnection rule?

Speaker C: I would start with consistency and transparency being fundamental to this process. Right. As I mentioned before, we walk around a lot looking at the grid and not really recognizing all of the things that contribute to it working effectively. And the utilities themselves work to document this. But as things have changed over the years of storms have knocked out power and things have been replaced, the utility grid is not necessarily cleanly mapped by the utilities. And the utility serves as a little bit of a black box.

Speaker A: Right.

Speaker C: Uh, we only know based on the processes that the regulators require, whether something is safe or not. It's usually a, uh, yes or no. Put in my application. Want to put in a project of this size, the utility says yes or it says no in terms of whether it can be done safely, or it says this is how much it's going to cost to upgrade it. And we have to make a decision whether we can or not. What we see for interconnection is that model can't work anymore. And so the idea of ways to bring that information out into the public so people can make rational decisions without tying up high level engineers and, you know, high level development activities in order to figure out whether things are going to be able to be deployed in this location or another. So one of the ways that we're advocating for this and we're seeing a way of kind of pulling the veil back on the details of the utility system and the utility infrastructure is through hosting capacity analyses or hosting capacity maps where the utility is not giving us everything that's happening on their grid, but is showing it various points along the grid, how much that grid can host as it is today, and then that will help indicate how much can be interconnected there and how expensive it might be to upgrade that area if we want bigger projects, whether they're bigger electric vehicle charging projects or bigger solar projects or bigger battery projects. So I would say transparency is one of the most important factors in interconnection procedures. And we see this in what the utility needs to report back on, transparency of costs, etc. And I would say that that's a fundamental service of regulators and because what it also helps to do, besides let folks make good decisions, is also to hold parties to account. So we all make mistakes, right? And having transparency allows parties to catch those mistakes. Our, uh, grid has limited capacity. We need to be able to connect as much as we can to it while we're figuring out how to upgrade and pay for it. And there are times when utilities just make mistakes. And so that transparency really helps to provide the insight that's needed in order to make this work. The other thing that's really important for why we get rules right is it's really expensive to have them wrong. Our time is finite. A lot of our public utilities and public service commissions are understaffed. What's happening with the growth of renewable energy on the grid and load on the grid is it's expanding the need for their services. And if our rules aren't right, it means more disputes. And more disputes take up time. They take up technical expertise and being proactive and looking forward and making sure that we have an environment where folks can do their job well and that we limit the Conflict that arises as we're trying to do this work to the really extreme cases where it's something new that we haven't considered before, that we really are focusing our attention on that as opposed to, you know, spending a lot of time on the real fundamental things that we have largely already solved across the country. Another key consideration for getting interconnection right on the regulatory side is to set timelines and accountability. We as states and we as a country have set climate targets and, you know, deadlines for when we do that. The reason we set timelines, deadlines is so that we have something to work towards and something to hold ourselves accountable to. And interconnection procedures need to do that as well. Right. So when you and I send in our application, it shouldn't just be able to sit on a desk for weeks. Right? It can happen. Those types of things happen with administrative paperwork. But if we put in language that says, listen, you need to let Gwen or Vaughn know that you've received this application within a certain number of days, and then you need to review it and get back to them within two weeks, three weeks time, that really helps to make sure that you and I understand what a reasonable expectation is for when things are getting done. And it also, it actually does a favor to the utility because it really requires them to structure processes in a way that can be replicated and that provides clear direction to their staff. The same thing happens with engineering studies for larger projects. Having timelines is extremely important, construction timelines so that folks know, I mean, this isn't necessarily to say everything has to be done right now. It's really important in these processes that all the parties just have a shared set of expectations. And if commissions are setting up expectations that say this type of upgrade is going to take this amount of time and takes into account, you know, where the pinch points are for the utilities and where the expectation points are both for the customer, for policy. That's really important because at the end of the day, the commissions are the accountability measure here.

Speaker B: Right.

Speaker C: Uh, if the utilities aren't doing what's necessary for the public good, and the public good has been established through laws and rules that supervise their monopoly, the commission serves to be the party that represents us, uh, you know, the people of whatever community we're in, whatever state we're in of the country, to make sure that our priorities as a society are being met by those utilities. And timelines are an important part of that, and the whole body of procedures are an important part of that. So that we have Shared expectations, and we have conflict about the right things, not the wrong things.

Speaker A: That makes a lot of sense. Thanks. So we've covered a lot of ground in terms of the wonky topic of interconnection. And, um, certainly there's a lot of complexity in this area and a lot of work to be done in our clean energy transition. I'm curious to hear what is it that gives you hope in this space?

Speaker C: So I knew you're going to ask this of, uh, me, because I've heard it on all of the podcasts thus far. This one I struggle with, not because I'm hopeless. When I think of hope, I think we always think of looking forward, like hope means something in the future, gives us the idea that there is goodness ahead of us. And when I think about my hope, it's something that's internal. It actually comes from the past in a lot of ways. We're recording this later in the week after this election. We have a result that I'm sure lots of folks who are involved in trying to address the climate crisis are feeling could be a significant setback. And I think as we focus on what it is that we are trying to achieve as this finite goal, I have found for myself that it's actually an obstacle for hope. For me, I think an attachment to an outcome is a really, really hard thing because when we set our sights on that thing, we assume at that time that we know exactly what will be good for us in the future. And as I look to the past, the struggles we have today, people have seen so much struggle that we can hardly begin to imagine. Right. I think of, you know, for myself, I live in Maine. My mom's family has been here. Uh, my kids are the seventh generation in the vicinity of where we are now. I can go to our family graveyard and see just struggle, struggle of people's. To be able to create the present that my family and I see today. And when I see great grandparents that lost children, lost, uh, multiple children and spouses, it really makes my struggles today feel very, very small. And just kind of thinking of that moving forward, that kind of sadness and loss provides me with a lot of groundedness and hope. I've had the profound, profound privilege to be able to work in communities that aren't like my own. I've done work in West Oakland, California. And a lot of folks would see West Oakland as an extremely poor community based on what we think about as poverty. And it was the place that birthed the Black Panther Party and a beautiful struggle that was really Hard. But the time I spent in that community showed me just how much richness is there, how much of the struggle that we go through for the things that are right really bring us the things that are meaningful. I spent time in the Northern Cheyenne and Hopi nations and seen that same thing. Communities that, by, uh, the measure that we tend to have, would be seen as poor. They're the richest communities I've ever spent time in. And so for me, it comes back to thinking about hope, comes to how do I spend my days and how do I be with the people that are around me? And that's my hope, is that by extending love and care for the people around me, that's a place where I can find influence. And listen, I'm a Mainer. We embrace struggle. And I will say that for me, just like, you know, I go backpacking not because it's easy. I go backpacking because, man, does that food taste good after you walk 12 miles and up and over and scratched and done all of the things. Because I feel like struggle begets beauty in life. And so my hope, especially amidst the times we're dealing with right now, is that we all lean into that struggle. Those of us who maybe have more privilege recognize that privilege and really lean in. And I think that's where hope is to me. It's in our human actions that we take every day, the perspective that we take. Right. We have to believe in possibility, and if we can't find it, looking forward, let's look backwards. Because there have been so many amazing examples of amazing achievements amidst the longest of odds. And for me, that's what gives me hope.

Speaker A: That's really beautiful. Uh, thank you, Vaughn. And that really resonates with me as well. I think, you know, kind of zooming out and viewing the challenges that we're dealing with in a much longer time frame is helpful, at least for me. You know, seeing that over time we're moving in the direction that we should be. Really appreciate you joining me today and walking us through all these topics, and thank you for your time.

Speaker C: Thank you, Gwen. I think I just want to leave. One thing is, like, if folks aren't feeling hope, go outdoors, see the Earth, because the Earth is going to be fine. It's up to us whether we're going to do the right thing for us. Right? So thanks, and have a great rest of your day.

Speaker A: You too. This episode of the Energy Optimist was produced and recorded by Gwen Brown and edited by the team at Podcast Engineers. Graphic design was provided by Nicole Wilson. And Megan Berry. If you enjoyed this episode of the

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