Evaluating the Role of Pre-Application Reports in Improving Distributed Generation Interconnection Process
The NREL report, Evaluating the Role of Pre-Application Reports in Improving Distributed Generation Interconnection Process, evaluates the impact of the pre-application report process and how it relates to the application approval rate.
Evaluating the Role of Pre-Application Reports in Improving Distributed Generation
Interconnection Process (Petersen and Lockhart 2018)
This summary document is based on the NREL report that evaluates the impact of pre-application
reports on project approval rates. The objective of this report is to highlight the
key takeaways from a regulator's perspective when they evaluate the need for a pre-application
report.
With distributed energy resource (DER) integration levels increasing rapidly, utilities are facing a challenge in managing the application process. This could potentially lead to delaying application processing, straining customer relationships, and hindering regulatory compliance. It is important to streamline the interconnection process by utilizing tools such as hosting capacity maps and pre-application reports.
Key Takeaways
Pre-Application Report Studies
A pre-application report provides technical information about a specific point of interconnection. Customers can request utilities to provide this before submitting the interconnection request application to get a general sense of time taken to process application, need for supplementary studies, project economics, etc.
This report provides details about a study conducted by Massachusetts to evaluate the impact of pre-application reports on project approval rate. While the study concluded that the applications, when submitted after getting pre-application reports, were approved 24% more than otherwise, there is no certainty that the cause for this improvement can be solely attributed to pre-application reports. In addition to Massachusetts, early implementation of pre-application reports and hosting capacity maps in their application process in California and Hawaii have led to a reduced number of non-viable projects.
Formal Rules
As of 2018, 12 states have formal rules for pre-application reports. State regulators need to keep in mind that this doesn't have to be mandatory for all interconnection requests. For example, Massachusetts mandates pre-application reports for systems larger than 500 kW. Additionally, states may also require a fee to compensate the utility for preparing the report. The Federal Energy Regulatory Commission (FERC) Small Generator Interconnection Procedures (SGIP) mandates a $300 fee. Most of the states provide this pre-application report within 10 to 20 business days. A majority of the states that have currently implemented the pre-application report align with the SGIP mandated by FERC Order 792, which identifies 13 criteria for the utilities to include in the report.
Evaluating the Hypothesis
In order to evaluate the hypothesis, the utilities reported information on application date, design capacity, POI location, studies completed, and project status. The data was refined to only select PV and PV-plus-battery to accurately determine the factors affecting the results. The pathway analysis examines how each state categorizes the interconnection requests into expedited and standard review processes, all of which are critical to the analysis. As stated above, it was seen that the projects that had access to the pre-application report saw a higher approval rate confirming the hypothesis. However, it could not explain why certain projects were canceled. There is no information about any improvement in the quality of application either. These would be important for regulators evaluating the need for pre-application reports in their jurisdiction.
Additional Considerations
This report provides a list of additional data required to refine this analysis which includes circuit level data such as hosting capacity, voltage and number of phases, utility and developer attributes, project level costs (to identify financial risks and uncertainty), and national level data on interconnection. Regulators can decide, depending on the interconnection levels in their jurisdiction, to use more advanced technologies and analyses to improve interconnection process and transparency in the grid. Pre-application reports are just one of the low-cost, low-effort methodologies which is easily available.
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