In a recent order from the Minnesota Public Utilities Commission (the “Commission”), Minnesota took a big step to update the state’s interconnection process and standard interconnection agreement for distributed energy resources or “DERs.” This ongoing process relates to Minn. Stat. § 216B.1611 which directs the Commission to establish generic standards for utilities’ tariffs that govern the interconnection and parallel operation of distribution generation with a capacity of up to ten megawatts (“MW”). Minnesota’s original DER standards, which date back to 2004, were forward-looking at the time but have become outdated as technology has advanced and deployment of DERs (especially solar) has exploded.
Citing the evolution of national best practices for interconnection, a group of DER advocates filed a request to update the Minnesota interconnection standards in 2016. The process was largely broken into two distinct topics: the Distributed Resources Interconnection Process and the Distributed Energy Resource Interconnection Agreement that were explored by stakeholder working groups. The process was also broken into two phases: Phase I is the Commission update to the interconnection process, application, data submittal and agreement and Phase II is the Commission update of the technical requirements for interconnection. As part of Phase I, the Commission issued proposed updates to the process and form agreement, and a notice of comment on the proposed updates. After multiple rounds of comments and another draft from the Commission, the Commission adopted updates to standards for the DER interconnection process and the standard form interconnection agreement in a major step for Phase I of the overall process in an order published August 13, 2018.
The following are some of the updates and improvements made to Minnesota’s current DER interconnection procedures:
- Customers have the option to request a pre-application report with location-specific information;
- Language has been included to ensure that utilities maintain an orderly queue of interconnection applications, and utilities with large amounts of applications employ a public data queue;
- “Fast track” processes for facilities within specified capacity thresholds and defined screening criteria to expedite review for smaller projects;
- Improved communications procedures including electronic applications; and
- New financial provisions including fee caps based on facility size and type of review.
The Commission set June 17, 2019 as the effective date for the new rules and required rate-regulated utilities to file updated tariffs. Xcel Energy, which has by far the most installed DERs on its system in the state via its community solar garden program, will propose a transition process for that program to the new interconnection standards in its compliance filing. Stakeholders are also continuing to work through updating technical issues in Phase II of this process. Engineers are scheduled to meet on September 29, 2018 in preparation for Phase II.
Finally, in addition to further work on technical standards, DER advocates filed a related petition earlier this year to update the state’s guidelines for the rates paid by electric utilities for DERs 10 MW and smaller. The petitioners argued that, like the DER interconnection standards the Commission is updating, the current DER rates (which are low) are outdated and ripe for review. The Commission recently issued a notice of comment period on this topic, with initial comments due September 19, 2018. If the Commission decides to update its guidelines for the financial relationship between utilities and DER customers, the updated rates and interconnection standards could together offer significant new opportunities for DERs in Minnesota.