Comments on Track 2 Straw Proposal

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

AES appreciates the CAISO identifying informational resources for the zonal approach to interconnection. AES believes that the identified resources should be consolidated into a centralized report for market participants to review the details of each zone properly.  The CAISO should adopt AES’s Annual Report concept that provides the following information: 

• POIs in each zone 

• Existing and planned deliverable capacity in each zone 

• Map and status of current queue in each zone 

• Line diagram identifying substations in each zone 

• Identified constraints for each substation 

• The MW ability for each substation to be expanded  

• Transparent price range per MW for interconnection in each TPP zone with a price cap 

The Annual Report should be published to stakeholders at least 12 months, if not sooner, for stakeholders to review and prepare for the following queue window. With the proposed scoring criteria requiring increased developer due diligence to ensure the most ready projects move forward into the interconnection queue, it is crucial for CAISO to provide assessable, transparent information to stakeholders. Moreover, FERC 2023 requirements on-site control will require developers to need zonal information at least 12 months prior to the queue window as land acquisition requires significant resources  The Annual Report provides certainty to stakeholders on each of the different zones, physical constraints, and potential headroom. Alternatively, if CAISO is concerned regarding timing of publishing an Annual Report given the different timelines between the CAISO and CPUC processes (i.e. the transmission planning process (TPP), transmission plan deliverability allocation process, and CPUC’s busbar mapping), CAISO can maintain an up-to-date webpage that is updated based on information from CAISO and CPUC.  For example, in each one of the interconnection zones, the webpage can note the MW capacity at each point of interconnection based on the current TPP and busbar maps. 

In the near term, CAISO should indicate whether Cluster 15 projects fall into the interconnection priority zones. It is in the best interest of CAISO and developers to ensure Cluster 15 projects are most ready to be scored in 2024. Early indication of whether projects are in zones provides guidance for developers to prepare those projects for scoring, and allows CAISO to review ready projects. AES recommends the CAISO provide zonal guidance by the end of 2023 for customers in Cluster 15. 

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. 

AES supports identifying LSE interests within the scoring criteria to support projects to be selected in the queue.  However, the CAISO and the working group need to carefully evaluate how to define LSE interests to ensure that the value of LSE interest letters isn’t diluted due to oversubscription.   

Without firm pricing certainty as discussed in AES’s Interconnection Intake proposal, AES does not believe that commercial procurement activities can be incorporated early in the process. The development process requires some level of cost and timing certainty to execute a meaningful offtake agreement.  In AES’s discussions with offtakers, concerns were raised about signing PPAs too early.  As discussed below, AES is also concerned that including offtake agreements at the time of application will cause the value of PPAs to dilute as PPAs may contain various exit clauses. AES recommends the working group explore alternatives to indicate offtaker interest that is not without a fully executed PPA. 

b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. 

AES believes that the scoring criteria, once fully fleshed out, outweigh any potential benefits of the auction proposal. The scoring criteria will create appropriate screening for projects to be measured equally against each other. That process will depend on project due diligence and project readiness. 

However, the auction element depends on participants bidding for the right to be studied. AES does not believe that the auction recognizes the value of project readiness as participants may bid high to be selected although the project may not be as ready as another participant’s project who are unwilling to bid high.  AES is concerned that the auction process will create a “bidding war” in the interconnection queue, rather than allowing most-ready projects to be studied.  As discussed below, AES recommends CAISO to eliminate the auction process and focus on developing the scoring criteria to minimize the potential for “tie breakers.” If “tie breakers” are to occur, CAISO can consider an alternative mechanism, such as studying all the projects (thus pushing the studied cap beyond 150%) or delaying the projects to the next cycle. This will eliminate the need for CAISO to implement a new auction process that was not supported through the stakeholder working group process. 

c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO.  

Developer Cap 

AES strongly opposes the proposed developer cap of 25% of submitted applications that would be scored. The developer cap is an unvetted proposal that was not discussed in the working group. The proposed 25% developer cap has not been supported by data evidence that a developer can capture an inappropriate market share of the available transmission capacity. The CAISO noted on the stakeholder call that the developer cap’s purpose is to prevent market power by eliminating the potential for a small subset of developers to enter the queue. AES believes the CAISO is prematurely addressing a hypothetical issue that market power will exist with the current proposal that already limits studies to 150% of available transmission. While the zonal approach is proposed to limit studies to 150% of the available transmission, further queue capping of developer applications is unnecessary as no evidence of market power exists. If market power is exerted, the interconnection queue is not the appropriate venue to address the issue.  The California Public Utilities Commission and other LRAs would be the appropriate jurisdiction to assess market power over RA prices if exerted.   

AES is further concerned about open access/preferential treatment with CAISO’s developer cap proposal. As proposed, non-CPUC jurisdictional local regulatory authority (LRA) projects are not subject to an application cap or scoring criteria. In fact, CAISO staff clarified at the stakeholder meeting that non-CPUC jurisdictional LRAs are automatically admitted into the study process and their studied projects are inclusive of the studied 150% of available transmission. AES believes this raises discriminatory treatment between independent power producers and utility-back generation, in addition to CPUC jurisdictional and non-jurisdictional entities. AES recommends the CAISO require equal treatment to non-CPUC jurisdictional LRAs and include a category in the scoring criteria for LRA-supported projects to receive additional points, rather than automatic acceptance. 

AES notes that no other ISOs/RTOs have implemented a developer cap.  SPP has tariff language that allows them to post a notice to close the queue once they feel they are getting a sufficient number of projects. MISO is looking to adopt a more transparent hard cap of the queue applications that is a function of shoulder peak load minus existing and queue generation Pmins. While MISO proposed to add an additional developer cap on top of the study cap, MISO has since dropped its developer cap proposal on the basis of discriminatory treatment.  

The CAISO should consider other non-discriminatory mechanisms to ensure developer diversity. The scoring criteria can include additional points for supplier diversity, such as awarding higher points to the first project(s) submitted by a developer.   

The CAISO should also allow Option B projects to interconnect in the zones as a mechanism to check potential market power through additional market supply. As resource adequacy (RA) prices increase, this will make Option B projects more viable, and developers will be willing to invest in these upgrades. As the supply increases this will lower RA prices, which will decrease the viability of Option B projects. Therefore Option B projects can be an effective mechanism against potential market power, and would be more effective than an arbitrary developer cap.  

If CAISO moves forward with a developer cap, they should provide a legal review and justification on how this will not violate open access or be unduly discriminatory in the draft final proposal for stakeholders to review and consider.  

Scoring Criteria 

AES believes that the scoring criteria need to be simple, objective, and consistent with the development process. AES recognizes that further refinement of the scoring criteria is needed. As proposed, the scoring criteria for permitting may not equally measure projects against one another.  

Every project has different permitting requirements, and the scoring criteria may not accurately capture the diversity of permits that are project-specific. This may lead to subjectivity in assigning scores. In addition, the permitting criteria need to be consistent with the development process. For example, conditional use permits are usually not granted until later in the queue process after study completion. Instead of basing the scoring criteria based on permits obtained, CAISO and the working group can consider points for projects that have completed early screening for potential permitting “red flags”. This could indicate the developer’s due diligence in vetting out any potential “red flags” to obtain the appropriate permits.  

In addition, AES does not support the commercial readiness requirements. Without any firm pricing certainty nor indication of whether the project will be studied, offtake agreements are unobtainable or have little value at the time of application. As other stakeholders have mentioned, the requirement for an offtake requirement may potentially cause the value of PPAs to dilute.  For example, PPAs may contain multiple exit clauses that give the developer and the LSE the ability to terminate the contract depending on interconnection results. Therefore, requiring offtake agreements at the time of application would not provide the same value as offtake agreements traditionally hold today. Instead, the CAISO and the working group can consider other methods for demonstrating readiness unrelated to offtake agreements, such as site-specific generating equipment. 

As discussed above, to address CAISO’s potential concern of several developers overtaking the queue process, the scoring criteria should include an additional category for developer diversity instead of implementing a developer cap.  

d. Please indicate interest in participating in a workgroup to refine scoring criteria. 

AES is interested in participating in a working group to refine the scoring criteria. 

e. Please provide feedback on auction design and use of auction revenues. 

AES opposes the proposed auction mechanism for “tie breaker” projects, or projects that are equally scored causing the study amount to surpass 150% of available transmission. As discussed above, AES believes that any bidding mechanism for the right to be studied may cause a “bidding war” whose cost ultimately trickles to ratepayers. Bidding is not an appropriate mechanism to compare projects against one another. For example, projects will larger network upgrades will always bid compared to a project requiring fewer network upgrades. 

AES believes the proposed auction mechanism causes discriminatory treatment since projects within the same cluster would be treated differently. CAISO proposes that projects with higher viability scores would be studied and not undergo the auction. The auction would only apply to a subset of projects that cause projects to cross the 150% study threshold. AES believes this is differential treatment between projects as auctioned projects are subject to a different at-risk financial security than higher viability projects that are not auctioned.  

AES believes that there is an alternative mechanism than auctioning “tie breaker” projects. The CAISO should either study all of the tie breaker projects or require the tie breaker projects to resubmit the following cycle with a point boost. AES believes that the proposed study level of 150% of available transmission capacity should be flexible, rather than a hard cap. 

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

AES believes that Option B should continue to be an option for projects that are unselected through the scoring criteria to maintain open access. Option B projects are merchant funded, and CAISO should not eliminate the ability for developers to self-fund projects into the interconnection priority zones as developers hold the financial risk. Given that CAISO proposes to only study 150% of the available transmission, allowing Option B projects to enter interconnection priority zones can help hedge any potential underplanning through the CPUC’s resource planning process.  Moreover, if CAISO is concerned about market power given its developer cap proposal, allowing Option B projects into interconnection priority zones is crucial to ensure a diversity of projects entering the market. 

The CAISO should clarify that Option B projects are guaranteed deliverability since upgrades are self-funded. The CAISO should also clarify its cost recovery proposal for ADNUs. Will other developers subject to the same ADNUs be able to cost share? 

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

a. TPD allocation  

AES supports further exploring TPD allocation reforms either in a working group process or a separate stakeholder initiative.  However, AES opposes CAISO’s proposal to limit Energy Only projects to TPD Allocation Group C.  Limiting Energy Only projects to TPD Allocation Group C does not allow significantly developed projects to be evaluated equally for TPD allocation. Limiting the allocation group for Energy Only projects essentially allows CAISO to define what projects are awarded TPD and provide RA value. In addition, AES notes that CPUC procurement orders have recognized the need for Energy Only projects. Only allowing Energy Only projects in Group C will decrease the ability for projects to obtain deliverability, and thus not contribute to CPUC procurement orders. 

Regarding further TPD allocation reforms, AES shares NextEra’s concerns noted on the 9/28 stakeholder meeting regarding the deliverability allocation of Cluster 13 Energy Only projects and Cluster 14 projects.  AES agrees with NextEra that projects within the same deliverability allocation group should be equally treated. Currently, Cluster 13 projects are converted to Energy Only due to the lack of deliverability allocation. Under the current tariff, Cluster 14 projects receive higher allocation priorities over Cluster 13 Energy Only projects, even though Cluster 13 Energy Only projects receive higher affidavit scores.  AES recommends that CAISO address this concern prior to the following TPD allocation cycle in February 2024. 

b. Interim Deliverability 

AES supports exploring multi-year interim deliverability relief.  AES seeks clarity on whether the multi-year interim deliverability is similar to the conditional deliverability discussed in the Generator Deliverability Stakeholder Initiative. AES recommends the CAISO to allow developers or PTOs to fund network upgrades to improve interim deliverability while long-term transmission is built. 

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? 

AES supports the one-time withdrawal opportunity. 

b. Are the updates to the Limited Operation Study sufficient? 

AES appreciates and highly supports the updates to the Limited Operation Study to be requested 9 months prior to synchronization. 

c. Comments on adding asynchronous generating facility requirements in the SGIA 

AES has no comment at this time. 

d. Comments on removal of suspension rights 

AES does not support the removal of suspension rights. Suspension rights are critical for larger projects to have flexibility to accommodate delays out of the interconnection customer control, such as permitting. In FERC Order No. 2003, FERC allowed generators to suspend work on interconnection facilities or network upgrades for up to three years for any reason. AES notes that FERC has found Arizona Public Service’s proposal to remove suspension rights inconsistent with or superior to the pro forma LGIA. FERC has stated that removing suspension rights unduly limits the reasons for which an interconnection customer may request a suspension while the pro forma LGIA allows suspension for any reason.¹ 

¹ FERC Notional Order. ORDER ON TARIFF REVISIONS, Arizona Public Service Company. September 29, 2023.  

e. Comments on TPD Transferability proposal 

AES opposes TPD transfers that require the transferring project to withdraw. The CAISO stated on the stakeholder call that the basis of this proposal was the concern that TPD would become a trading commodity in the future.  However, AES believes that the scoring criteria will eliminate this concern since only the most ready projects will be allowed to enter the queue.  AES believes the CAISO should maintain flexibility in TPD transfers to ensure that developers can contract to convert projects with assigned TPD into projects that can reach COD. In the short-run, CAISO should allow more flexibility in TPD transfers since these projects have already been studied, CAISO should make it as easy as possible to convert this sunk cost in terms of studies and TPD allocation into operational MWs.  

f. Comments on viability criteria and time-in-queue limit 

AES has no comments at this time. 

g. Comments on project Modification updates 

AES supports proposals to (1) increase deposit and (2) require coordination calls between the PTOs/CAISO/IC. While AES supports increasing study deposits from $10,000 to $30,000, AES believes additional study costs should contribute to additional resources to complete MMAs more efficiently and quickly.  

h. Comments on postings for shared network upgrades 

AES supports requiring all affected customers to post security once the first project provides their Notice to Proceed and security. 

i. Comments on timing of incorporating MMAs into the GIA 

AES supports CAISO’s proposal to update the LGIA nine months before synchronization once all MMAs are completed. AES believes this change can create further efficiencies in the MMA and LGIA process. 

j. Comments on timing on starting network upgrades 

AES highly supports requiring PTOs to notify the IC and CAISO that network upgrade activities have begun once the IC posts the Notice to Proceed and third security to minimize upgrade delays. 

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

ACP-California supports the provision of as much data as possible to support the accurate submission of interconnection requests under the proposed zonal approach. While CAISO has outlined several data sources that can be useful to customers in understanding the zones and expected transmission capacity within a zone, we are concerned that the current availability of data is insufficient and that a more comprehensive, single source is necessary to facilitate the efficient transition to a zonal approach. We appreciate that CAISO is continuing to evaluate the form and structure that might work for this type of additional information and that it is difficult to envision what this data source might consist of. While we do not have any highly specific suggestions at this time, our members would be happy to work with CAISO to explore options and convey the needs of interconnection customers. Additionally, at a minimum, we suggest that CAISO commit to pulling the various data sources discussed in the Straw Proposal and stakeholder presentation into a single location that is available for future interconnection customers to review ahead of the opening of an interconnection request window. This would help ensure that potential interconnection requestors are looking at the most relevant information and that the sources they are using are the most accurate and up to date for the relevant interconnection window. If this does not occur, then interconnection customers may be looking at data sources which are not correct for the upcoming request window.  

In implementing the zonal approach and determining which priority zones are eligible for interconnection request submission, ACP-California requests that CAISO consider a slight, but impactful, expansion of the definition of a priority zone to help address potential delays in coordinating between the CPUC and CAISO processes that affect the definition of a priority zone. The Straw Proposal states that a priority zone is one where transmission capacity exists or has been approved for development. ACP-California recommends that CAISO expand the definition of a zone to include an area where “transmission capacity is expected to be approved in the next TPP based on the busbar mapping from the CPUC’s resource portfolios.” This would help ensure that zones where transmission capacity will soon be approved are included and help reduce delays in processing interconnection requests due to the coordination between the CPUC IRP, CAISO TPP and interconnection process. 

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

(a) While ACP-California recognizes some concerns have been raised around LSE interest and commercial procurement activities and the associated proposed scores, at this time we believe the general direction CAISO has moved on this topic is appropriate. One concern that CAISO should consider is the use of a signed PPA as a realistic scoring criterion for entering the interconnection queue. As CAISO is aware, it is highly unlikely for a binding PPA to be executed prior to an interconnection request being submitted. Including this as an option (with a very high score) could lead to incentives for entities to enter PPAs which are not binding or meaningful. To avoid this incentive, and provide a more realistic assessment of projects, CAISO should consider scoring an executed PPA at the same level as an executed term sheet within the commercial readiness scoring. Additionally, CAISO should consider the letter of interest from an offtaker as either:  

1. A gating mechanism which all resources are required to submit for an interconnection request to be deemed valid, though any projects meeting one of the commercial readiness criteria would have this requirement waived (as being shortlisted, being a preferred resource, or having a term sheet already indicates interest from an offtaker); or 

2. Fitting within the commercial readiness scoring with a lower score (e.g., 10 points)

(b) ACP-California appreciates the balance that CAISO has sought to achieve with the scoring criteria, limitations on interconnection requests in each zone, and use of an auction in limited instances. The limitations on the use of auctions help to alleviate some of the concerns ACP-California raised around the negative impacts of an auction, particularly for long-lead time resources. While we appreciate that CAISO has sought to limit the use of an auction to targeted scenarios, we are concerned it might be an overly complicated way to break a tie. We would encourage CAISO to consider an alternative approach under which CAISO would retain flexibility to accept slightly more or less than the 150% capacity in each zone to break a tie. This could still result in instances where a tiebreaker is needed (based on the size of the tied resources) but might help simplify the process and further reduce the likely use of an auction process. 

(c) ACP-California would be willing to participate in a working group to further develop the scoring criteria, but beyond the feedback on commercial readiness/interest from an offtaker (discussed above in response to topic “a”), we do not have any specific feedback at this time other than to urge the need to thoroughly consider the commercial readiness and permitting criteria. 

(d) As discussed in response to topic “b”, ACP-California urges CAISO to continue to evaluate ways to reduce the need to utilize an auction. That said, if an auction does move forward as part of the process, CAISO should consider requesting bids only when needed (and not during initial interconnection application submission). This approach would be much more implementable for those submitting bids and would allow a developer to assess which projects in their portfolio require a bid before making that bid. The approach to auction revenues that CAISO has proposed is reasonable for the use of any funds received through an auction process. 

In addition to the interconnection requirements CAISO has requested specific feedback on (above), ACP-California reiterates concerns that have been raised with the proposed limitations on the number of total requests that a single developer can submit. CAISO has proposed to limit any single developer from requesting more than 25% of the available transmission capacity across the CAISO footprint for that cluster. This limitation is arbitrary and will be difficult to implement with different project structures, joint ventures, etc. ACP-California is further concerned that it could result in suboptimal projects moving forward in the interconnection process because of a restriction on single developer’s ability to submit interconnection requests results in the more optimal project being deemed ineligible due to this restriction. Furthermore, this restriction should be unnecessary given the use of the scoring criteria in the interconnection process. The scoring criteria should help to determine which projects can move forward and should help reduce the ability for any one developer to overwhelm the system with speculative interconnection requests.  

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

The Option B process provides a good foundation for the submission of interconnection requests outside of the priority zones and ACP-California appreciates CAISO’s inclusion of this option in the Straw Proposal. CAISO should also consider including in its proposal a mandated review of the Option B process, including the restriction to areas that are not priority zones, after gaining a few years of experience with its use. There may be benefits to expanding the Option B availability to priority zones as well, so that those zones are not entirely restricted from realizing transmission development for resources above and beyond the amounts envisioned in the CPUC portfolios. Requiring such a review as part of the IPE 2023 proposal can help ensure the effectiveness and limitations on Option B are working as appropriate. 

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

(a) ACP-California does not have any specific comments on the TPD allocation process but agrees that developing the details of the proposed changes to the TPD allocation process should come after there is better definition of the scoring criteria and zonal study process. ACP-California appreciates CAISO flagging the need to develop a methodology to account for long-lead time resources in the interconnection and deliverability allocation processes. We strongly support the development of such an approach and believe it is crucial to ensuring that transmission approved to accommodate the state’s policy goals can be utilized by those resources. As CAISO has highlighted, this will be particularly important for OSW resources. We look forward to working with CAISO to develop the details of the methodology to handle long-lead time resources once other elements of the IPE proposal are further developed.  

(b) ACP-California supports the idea of creating interim deliverability, as described in the Straw Proposal. We are concerned that there will likely be few projects that are eligible for this type of interim deliverability given the restrictions, but still support development of this approach and appreciate CAISO’s willingness to evaluate how to support resources entering commercial operation in the face of transmission delays.  

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

ACP-California does not offer?comments on each specific area that CAISO has requested feedback on for queue management. Instead, we focus our response on the removal of suspension rights (d), TPD transferability (e), and time-in-queue limit (f). 

(d) ACP-California opposed the removal of suspension rights in prior comments, citing the need for flexibility in the interconnection process for interconnection customers. CAISO highlights that there are other areas of flexibility for interconnection customers within the CAISO process that have made suspension rights less necessary for interconnection customers on the CAISO grid. ACP-California does not disagree with this conclusion, as evidenced by the infrequent use of suspension in the CAISO queue. Given the infrequent use of suspension rights, however, it seems their proposed elimination may not provide significant benefits to managing the queue. Thus, we encourage CAISO to consider whether it can maintain suspension rights going forward. If CAISO proceeds and ultimately makes a proposal to FERC on this topic then, at a minimum, the proposal should clearly highlight the other ways in which the CAISO process provides sufficient flexibility to interconnection customers as compared to many other interconnection processes. Given the unique nature of its process, CAISO should ensure the removal of suspension rights does not become precedent setting.  

(e) CAISO has proposed to severely limit the ability of interconnection customers to transfer TPD. We understand that CAISO is seeking to limit TPD transferability as there have been transfers that appear to occur primarily for the purpose of getting a newer project to take advantage of protection that might exist for earlier queued projects. In other words, the TPD transfers are used to move a project into an earlier cluster. We encourage a thorough discussion on this topic prior to the proposal moving forward. 

(f) ACP-California does not necessarily oppose the imposition of unavoidable time in queue limitations, but any such requirement must be accompanied by requirements for the PTOs which will enable interconnection customers to meet the deadlines. For instance, CAISO should impose a deadline for the PTOs to tender a GIA for execution if it is going to impose unavoidable GIA execution dates for customers.  

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

Avantus reiterates previous support for recommendations made by LSA, USE, and AES regarding pre-IR data accessibility, including information on open bay positions, buses that are behind ADNUS (and which ones). Additionally, Avantus requests CAISO to work with PTOs and pre-determine if specific POI substations are likely to encounter expansion and/or gen-tie constraints.

For your convenience, please refer to our previous comments below that were submitted in August:

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU.

Avantus reiterates previous concerns of policies that enable procuring entities to have outsized influence over the interconnection process. Should CAISO ultimately incorporate LSE interests within the proposed scoring criteria, there needs to be clear policies that guardrails LSEs from favoring their own projects.

b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements.

Avantus strongly opposes introducing auction elements to manage IR Intake as it enables a financial pathway for inclusion within a study cluster when scorings are tied (see additional comment in c). This is a drastic shift in CAISO policy which potentially undermines FERC open access principles.

c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO.

i. Please indicate interest in participating in a workgroup to refine scoring criteria.

Avantus is interested in participating in a scoring criteria working group.

At high-level, the current proposed scoring criteria appear generic, which may lead to scoring ties and potentially unintended consequences ahead of C15 if implemented as is. Some feedback:

Commercial Readiness:

• Few projects will be going into the queue with any of the 4 boxes checked.
• Inclusion of PPA in CAISO’s qualifying score criteria (with heavy weigh) is problematic as it perpetuates an inaccurate message the criteria is generally achievable.
• Amidst concerns from many stakeholders, we urge CAISO to consider eliminating, or dampening the weight of PPA within the scoring criteria.

Permitting:

• Permitting as a scoring criteria to enter queue is likely to lead to a rush of applications, exacerbating the backlog of already overwhelmed govt agencies.
• A best-case scenario CUP process takes ~18 months and can cost up to millions in studies.
  • Timing and cost involved to propel this effort comes with high risk for projects that will not know if they are sited within Option A zones.

Project Attributes:

• Avantus is monitoring feedback from other stakeholders on how to best validate projects’ ability to provide Local RA.

Project Location:

• The two scoring criteria do not belong in the same category
  • Energy communities are not synonymous with areas not needing ANDUs.
  • Paired with FERC Order 2023, we can also expect a land rush in these strategic areas.

Expansion on Operational Facility:

• Avantus requests CAISO clarifications on whether this applies to phased projects that intend to share facilities but the earlier stages are not yet operational (e.g., in study or in construction)

d. Please provide feedback on auction design and use of auction revenues.

Avantus reiterate previous comments where implementing auction elements within the generator interconnection process will advantage larger, well capitalized entities. The proposed 25% cap intended to enable some competition, is likely to limit competition equally. Instead of requiring additional IC financial commitment as a qualifier, CAISO could evaluate if a version of MISO’s proposed LGIP reform “queue cap” (slide 9 and 10) could be feasible and more equitable within the CAISO framework.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

In general, Avantus views CAISO’s Option B construct has not substantively changed and continues to pose major barriers for entry. With respect to comments from LSEs who either oppose or find limited value in the construct, we expect status quo in terms of future usage.

Avantus concur with LSA comments and GridBright’s request for clarification to option B outcome adjustments should ADNU becomes unnecessary between the time of IR and TPD allocation (e.g., TPP approves new transmission, higher queued projects withdraw).

Avantus also concur with LSA comments on providing reimbursement should sponsored upgrades demonstrate benefits to long term system reliability and/or for future projects.

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

a. TPD allocation

Avantus opposes preventing EO projects from seeking TPD until after COD when they already face more stringent requirements per CAISO IPE 2021 changes. Additionally, Avantus concurs with LSA and reiterates previous comments on the urgent need to address Option B and D TPD retention, as the next allocation cycle is quickly approaching. While we understand CAISO plans to separately address TPD reform, it is important for CAISO to establish workable bridging policies for projects that obtained TPD during the 22-23 cycle with insufficient time to meet retention requirements.

b. Interim Deliverability

Avantus assumes outcomes of Deliverability Methodology and RA Reform initiatives will guide future iterations of Interim or conditional deliverability proposals under IPE context. While additional details remain to be seen, Avantus finds information shared to date is in the right direction.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects?

Avantus concurs with LSA comments, that the one-time withdrawal proposal lacks comprehensive details to meaningfully reduce queue volume.

Should CAISO move proposal forward as is, Avantus requests CAISO to document in subsequent revisions that the “non-refundable” portion held by PTO until upgrade is in service would be immediately released should it be determined the NU is no longer necessary because of withdrawal of 1 or more projects.

b. Are the updates to the Limited Operation Study sufficient?

Avantus reiterates previous comments insisting that a planning horizon LOS is necessary to help IC optimize sizing earlier on. While CAISO’s ‘zone cap’ serves to pre-address such issue for future clusters, it is critical for current projects “lingering in the queue” pending long lead upgrades to be able to determine appropriate downsizing amount that render some of these upgrades unnecessary and partially or fully come online sooner.

c. Comments on adding asynchronous generating facility requirements in the SGIA

None

d. Comments on removal of suspension rights

Avantus reiterates previous comments that suspension rights should remain regardless of lack of historical use. The upgrade delays described in slide 35 – 36 of the August Generation Deliverability Methodology Review highlights exactly why CAISO should retain all available tools to ensure flexibility. Note also that APS’ most recent LGIP reform proposal to limit LGIA suspension was rejected by FERC, reaffirming its intention to preserve the tool.

e. Comments on TPD Transferability proposal

Avantus maintains TPD transfer policies should be left to that revised under CAISO IPE 2021.

f. Comments on viability criteria and time-in-queue limit

Avantus reiterates previous comments that time-in-queue limit (at least the current 7-year policy) conflicts with long lead time upgrades assigned to C14 projects. CAISO should consider revisions that centers around the upgrade lead time rather than imposing a defined number of years from queue date.

g. Comments on project Modification updates

Avantus continue to oppose leveraging LOS improvements to limit necessary late-stage MMA submittals. We request that CAISO demonstrate the need for this proposal by providing/discussing specific examples of late-stage MMAs that would invalidate LOS results.

h. Comments on postings for shared network upgrades

None

i. Comments on timing of incorporating MMAs into the GIA

Avantus requests CAISO to refine proposals for addressing potential ad-hoc LGIA amendment needs to complete project ownership transfer that are likely to take place more than 9 months before scheduled synchronization. 

j. Comments on timing on starting network upgrades

None

Other Comments for Topics not Included in Template

4.2.1 Site Control

Avantus requests CAISO to clarify if Site Control In-Lieu would be acceptable for Sites that can demonstrate Regulatory Limits, an option established per FERC Order 2023

Avantus also requests CAISO to provide a specific due date (or due period) for C15 Site Control in subsequent IPE proposal revision (e.g., April or May 2024)

4.2.5 Scoring Criteria for Prioritization to the Study Process

Avantus requests CAISO to refine the proposal and provide further guidance on how individual projects qualifying for Option A can best prepare to secure TPD allocation after the proposed single-phase study is complete. Additionally, Avantus requests CAISO to provide guidance for projects that qualifies for Option A and then do not secure TPD allocation post study. Specifically, please provide guidance on if projects in question will be required to withdraw or may proceed as EO, and what/if withdrawal penalty they may face.

4.3.3 Single-Phase Study Process

Avantus requests CAISO clarification to the Single-Phase Study Process in relation to the auction bid posting “withdrawal penalty” table on page 32. If there is only one study phase (akin to Phase II), please explain exactly how refund of the auction bid posting will be refunded in the event of a withdrawal.

5.7 Project Modification Request Policy Updates

Construction Sequencing

Avantus requests CAISO clarification and further context how adjusting the construction sequencing policy would assist in accelerating project progress.  

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

The Bay Area Municipal Transmission group (BAMx)^[1] appreciates the opportunity to comment on the CAISO’s 2023 Interconnection Process Enhancements Track 2 Straw Proposal (“Straw Proposal,” hereafter) and the subsequent workshop held on September 28, 2023.

In the CAISO’s annual transmission plan, the CAISO assesses the reliability of the transmission system to meet the forecasted load requirements and the ability to deliver resources to load for the resources identified in the portfolios provided by the CPUC. However, these portfolios do not adequately take into account the resources of non-CPUC jurisdictional entities that may be part of or, in some cases, outside of the zones designated by the CPUC. Therefore, BAMx strongly supports the Straw Proposal commitment to “… coordinate with the LRAs and non-CPUC jurisdictional entities, in addition to the portfolios received by the CPUC for the annual transmission planning process, to determine their approved resources in individual IRPs to include in the transmission planning analysis.”[2]  This will result in a more accurate representation of the needed transmission.

[1] BAMx consists of City of Palo Alto Utilities and City of Santa Clara, Silicon Valley Power.

[2] Straw Proposal, p.19 and CAISO Workshop Presentation, p.20.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

With any scoring process, BAMx strongly supports including any project that a non-CPUC jurisdictional LSE demonstrates is a preferred resource in its resource plan that has been approved by its Local Regulatory Authority (LRA).[1] This element of the Straw Proposal provides similar treatment to non-CPUC LRAs as the CAISO has provided to the CPUC LRA by prioritizing the CPUC-provided portfolio resources in the annual TPP. BAMx appreciates the consistent treatment of all LSEs within the CAISO footprint on generator interconnection and transmission planning matters. If adopted, this element of the Straw Proposal will ensure opportunities for non-CPUC jurisdictional entities to have their project needs considered in the TPP.

[1] Straw Proposal, p.26 and CAISO Workshop Presentation, p.23.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

BAMx supports the central tenet of the Straw Proposal, that is, prioritizing projects in zones with available transmission capacity for progression into the study process. BAMx appreciates the first principle to “Prioritize interconnection in zones where transmission capacity exists, or new transmission has been approved while providing opportunities to identify and provide alternative points of interconnection or upgrades.” BAMx understands that the projects or interconnection requests outside the zones can follow an “Option B” process, meaning these projects must finance all assigned network upgrades without cash reimbursement. BAMx supports the Straw Proposal element that requires the projects that seek to interconnect in zones that have no TPD available to proceed only as Option B projects, with the exception of any project(s) identified as a preferred resource in any non-CPUC jurisdictional LSE’s resource plan approved by its LRA. As discussed in our response to Q.2, the transmission needs assessed in the past TPP cycles were not informed by the non-CPUC jurisdictional LSEs’ resource plans, placing the LSEs of non-CPUC jurisdictional LRAs at a disadvantage. Exempting the preferred resources in any non-CPUC jurisdictional LSE’s resource plan approved by its LRA from the modified Option B treatment will help to remedy the past unequal treatment by ensuring opportunities for non-CPUC jurisdictional entities to have their project needs considered in the TPP.

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

 No comments at this time.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

 No comments at this time.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the California Independent System Operator’s (CAISO) Interconnection Process Enhancements 2023 Straw Proposal. CalCCA applauds the CAISO for making significant positive steps toward a more durable interconnection process that can accommodate the growing number of interconnection requests.

To aid in load serving entities (LSEs’) evaluation of projects in the interconnection queue, the CAISO should provide regularly updated information about existing projects in the queue that do not require any network upgrades, as the CAISO did in its May 22, 2023 presentation.[1] This information can help guide LSEs toward projects that require no (or minimal) upgrades.

CalCCA supports the CAISO’s proposal to provide data to stakeholders to enable the zonal approach to interconnection. The existing datasets demonstrated in the workshop combined with the heat map the CAISO will develop to comply with the Federal Energy Regulatory Commission (FERC) Order 2023 should provide stakeholders with the information needed to best focus interconnection requests and procurement, subject to the clarifications described below:

First, prior to implementing the zonal approach, the CAISO should clearly define how it will establish the zones and calculate the existing and planned transmission capacity that will be used to limit the number of interconnection requests studied. The CAISO should publicize information about available interconnection capacity at the same granularity that the CAISO will use to set the 150 percent limit on the amount of capacity it will study.

Second, to allow interconnection customers and LSEs to make the best use of the data, the CAISO should provide this data in a single consolidated report or database so that all the information needed is consistent and can be found in one place.

Finally, the final proposal should provide clear information on the following: 1) Is available capacity equivalent to available transmission plan deliverability (TPD) or does it include all unused capacity (which may include projects in the queue that already secured TPD)?; 2) will projects be counted using their maximum capacity (Pmax) at the interconnection or using a methodology consistent with the generator interconnection and deliverability allocation process (GIDAP) (e.g. solar and wind exceedance adjustments); and 3) are “zones” equivalent to the TPD constraint zones or the broader “transmission areas” depicted in Figure 1 in the straw proposal?

The CAISO should aim to publish a draft of the information described above based on assumptions it will use in the forthcoming 2024 GIDAP process. This will provide much-needed clarity on the format of data and calibrate the magnitude of interconnection capacity the CAISO will study within its proposed 150 percent threshold.

[1]             http://www.caiso.com/Documents/Briefing-ResourcesAvailable-NearTermInterconnection.pdf.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

Incorporating LSE Interest and Commercial Procurement Activities

CalCCA thanks the CAISO for including LSE interest and procurement activities in the scoring criteria. Because the CAISO will not be studying all interconnection requests under the zonal approach, it will be very important for LSEs to have a say in what projects are studied so that the study process provides LSEs with a sufficient collection of projects that reflect LSEs’ desired resource characteristics and diversity.

The scoring criteria for LSE interest and commercial procurement activities should be designed in a manner that:

• Meaningfully differentiates between projects, rather than assigning the same amount of points to all projects that receive LSE interest (CalCCA believes the binary letter of interest scoring is not sufficiently granular).
• Requires an appropriate level of commitment considering when scoring will take place relative to the determination of cost estimates and upgrade timelines.

With these considerations in mind, CalCCA makes the following recommendations on how to incorporate LSE interest and commercial procurement activities into the scoring criteria.

CalCCA continues to support the Sonoma Clean Power (SCP) proposed remaining import capability (RIC)-type mechanism for scoring projects based upon LSE interest.  SCP’s proposal would allow LSEs to provide meaningful input into which projects are studied informed by their own IRPs and preferences for technologies and locations. SCP’s proposal also recognizes that the commercial readiness criteria proposed in the straw proposal, including an executed term sheet for a power purchase agreement (PPA) or an executed PPA for at least five years, may not be feasible for most projects to have at the time of scoring. LSE interest through the assignment of points is more appropriate, especially if there is uncertainty around deliverability status, network upgrade costs, and network upgrade timelines at the time of point assignment. Using the SCP approach, the CAISO should allocate points such that the LSE interest portion can make up to 30 percent of the total score. This aligns with the LSE letter of interest points plus commercial readiness points in the straw proposal and puts sufficient weight on the LSE interest portion of the score.

The CAISO expressed concerns about the potential time the SCP proposal would add to the interconnection request intake and scoring processes. CalCCA understands the CAISO’s desire to limit potential steps that could extend the time it takes to conduct these processes. However, it is more prudent for the CAISO to take the time upfront to use more robust scoring criteria to rank projects’ viability on a more granular level as opposed to taking more time at the back end to conduct an auction. More granular scoring criteria could eliminate the need to have an auction mechanism, which would also be a time-consuming endeavor but reveal less in terms of projects’ viability.

Additionally, the current RIC process is very efficient and should be used for interconnection scoring. In the RIC process, LSEs have less than two weeks to make their election, and a similar turnaround could be instituted for interconnection scoring. It is also very likely that LSEs can assign their points in parallel with the CAISO’s processes to validate interconnection requests and assign points for the other scoring criteria. This would likely eliminate any delay in the process caused by LSE scoring.

The CAISO could also consider simplified alternatives to SCP’s original RIC proposal: instead of using capacity, 1) have LSEs score each project on a 1-10 scale and take a load-weighted average for each project or 2) ask LSEs to score interest in various project, technology, and COD combinations ahead of accepting interconnection applications that could then be applied to submitted applications. 

Scoring Criteria Recommendations

Recommendation 1: The CAISO proposes to “automatically include any project that a non-CPUC jurisdictional LSE demonstrates is a preferred resource in its resource plan that has been approved by its Local Regulatory Authority.”[1]  As CalCCA understands the proposal, this would allow projects that are identified in non-CPUC jurisdictional LSE plans to bypass the scoring criteria and automatically be included in the proposed 150 percent cap on capacity that the CAISO studies. CalCCA disagrees with this approach because it creates an unlevel playing field for CPUC versus non-CPUC jurisdictional LSEs procuring projects to meet their integrated resource plans (IRPs) and procurement mandates. The CAISO’s proposal would create incentives for developers to contract with non-CPUC jurisdictional LSEs over CPUC jurisdictional LSEs because they would automatically be studied. The CAISO should instead ensure projects that support CPUC and non-CPUC jurisdiction resource plans are studied in the Transmission Planning Process (TPP), inform the TPP zones, and can compete on an equal playing field to be studied in the interconnection criteria by demonstrating comparable viability criteria. To accomplish this, the CAISO should (1) coordinate with LRAs and non-CPUC jurisdictional entities to include their approved resources in their IRPs, in addition to the CPUC portfolios, in the TPP (which the CAISO already indicates in the Straw Proposal that it will do) and (2) revise its proposal to have comparable scoring criteria among projects identified in CPUC and non-CPUC jurisdictional resource plans.

Recommendation 2 and 3: The CAISO proposes two limits on interconnection requests. The first would limit the number of requests a developer may submit in a cluster window to 25 percent of available transmission capacity across the CAISO footprint. The second would limit the amount of interconnection requests the CAISO studies to 150 percent of available transmission within each zone using scoring criteria to select the most viable projects. The first limit attempts to resolve the CAISO’s concern around reduced competition among developers competing for contracts with LSEs if only a small number of developers are selected to be studied. CalCCA shares this concern. However, the second criteria (studying up to 150 percent of available transmission) could potentially create reduced competition by limiting the number of projects studied in each zone.

CalCCA supports a zonal approach where the CAISO selects the most viable projects to study within each zone. However, CalCCA remains concerned that only studying 150 percent of the planned or existing transmission capacity is too little, considering the transmission system is planned based upon projected resource portfolios that LSEs will procure. If the CAISO only studies 1.5X the amount of capacity needed to support reliability and policy goals, LSEs would experience significantly reduced bids in their request for offers (RFOs) relative to their procurement needs. Past experience also shows that many projects do not ultimately proceed in the development process and may drop out after it submits its interconnection request but before the contracting process. While some projects may offer to multiple LSEs, multiple LSEs may have interest in the same project, too. CalCCA instead recommends the CAISO increase the limitation on the number of projects studied in each zone cap from 150 percent to at least 200 percent.

CalCCA supports the intent of the 25 percent cap for a single developer, which is to prevent one or a few developers from having the ability to exert market power when contracting with LSEs for capacity within the transmission zones. In the stakeholder call, however, developers expressed concern with the 25 percent cap given its potential to restrict the amount of interconnection requests they could have studied by the CAISO. In addition, a cap on the number of requests a developer can submit may not necessarily mean a diverse set of developers is selected to be studied through the scoring criteria.

To balance the concerns of the developers on the restrictiveness of the proposal and the concerns of CalCCA and the CAISO regarding the potential ability for limited competition among developers selected to be studied, CalCCA recommends the CAISO assess its total transmission capacity (plus an adder that aligns with the amount of capacity the CAISO will study in the interconnection study process) and the developer make-up of cluster 15 requests to determine what level of cap would obviate a pivotal supplier issue. The CAISO could then modify the cap based on that assessment. The right level to set the cap for individual developer requests will depend on the cap chosen for the number of interconnection requests to study. The CAISO may find that the 25 percent cap is necessary to prevent the potential for too few developers’ requests studied or it may find that the cap could be raised and still provide for adequate competition. Either way, CalCCA supports setting the cap at the right level to ensure adequate competition.

Because the developer cap the CAISO proposes is on the interconnection requests a developer submits and not the interconnection requests a developer has studied there is still a potential for uncompetitive outcomes where a few developers have their projects studied. To remedy this, the CAISO could introduce a resource diversity score into the scoring criteria, which could help in both ensuring the diversity of developers and ensuring a pathway for long lead time resources or technologies needed to support policy and reliability objectives.

Relationship and Trade-Offs Between Scoring Criteria and Auction

The CAISO should focus its efforts on developing scoring criteria that rank projects based on their viability at a granular enough level to limit the amount of tie scores. If there are a few instances of tie scores, the CAISO should accept each of the projects that are tied, rather than putting them through the auction. As described in the next section, this approach will avoid the shortcomings associated with an auction mechanism and focus administrative efforts on identifying the most viable projects, rather than identifying projects that can put up the most money in an auction.

Auction Design and Use of Auction Revenues

In previous comments, CalCCA expressed various concerns with the auction mechanism. CalCCA was concerned that an auction would:

1. Result in increased costs to ratepayers because the costs associated with bidding into the auction will ultimately flow to them;
2. Result in the highest bidders being studied rather than the most ready being studied;
3. Incent speculative projects to enter the queue by creating a secondary market where those projects can sell their queue position later; and
4. Limit competition among developers by favoring larger developers with deeper pockets over small developers.[2]

The CAISO’s design of the auction partially addresses some of CalCCA’s concerns by using auction revenues to fund offset network upgrades that ultimately get paid by ratepayers and by only using the auction in the event projects have equal viability. Still, the auction could increase costs to LSEs contracting with projects selected by the auction because the financing costs associated with the posting the auction funds would likely be recovered through the contract. The auction process could also still favor developers with deeper pockets, rather than allowing all developers with equal viability to compete for contracts. In addition, the auction process seems to introduce a significant amount of administrative burden for minimal benefit. CalCCA recommends that instead of developing an auction, the CAISO focus on developing scoring criteria robust enough to rank projects’ viability and minimize occurrences of equal viability scores among projects. If projects do receive the same viability score, the CAISO should study all tied projects (or study none of the tied projects if they have a viability score of zero).  

Workgroup to Refine Scoring Criteria

CalCCA supports a workgroup to further refine the scoring criteria and very interested in participating in this workgroup. The perspective of LSEs will be necessary within the workgroup to ensure scoring criteria align with LSE procurement activity.

[1]             2023 Interconnection Process Enhancements Track 2 Straw Proposal (Sept. 21, 2023) at 26.

[2] https://stakeholdercenter.caiso.com/Comments/AllComments/1198f707-8b68-4560-bb9a-7dd64ea2b57d#org-d8462b15-4465-49d6-a464-9df1f71ab2ce.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

The CAISO proposes that only projects interconnecting in areas with no available or planned TPD capacity would be eligible to use Option B. Option B would not be available for projects that did not score enough to be studied in the transmission zones with planned or available capacity. CalCCA recommends the CAISO modify this proposal to allow projects within transmission zones that did not score high enough to be studied to elect to move forward as Option B. If projects in transmission zones that do not score high enough would like to fund their own area network upgrades rather than receive reimbursement, they should be able to do so. While the CAISO suggests that allowing projects in transmission zones to proceed under Option B would be counterproductive to solving the issue of studying capacity levels so high that the study results lose accuracy, it is not certain this would be the result. Option B is not used today under the current rules, and it is unclear whether the proposed changes to the Option B rules would result in an influx of Option B projects. If upon implementation of this initiative, the CAISO does see an influx of Option B projects, the CAISO could consider requiring Option B projects within transmission zones to elect Option B upfront (rather than being scored) or limiting Option B projects within transmission zones using the same scoring criteria.

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

CalCCA supports the CAISO’s plan to develop a TPD allocation after details of the scoring criteria are finalized. The TPD allocation process should be updated to align with the scoring criteria that will be used to rank projects for study so that the projects that are determined to be the most viable in the study process are first in line to receive deliverability. CCAs often require a project to have a deliverability allocation in order to move forward with contracting with the project. Aligning the scoring criteria and the TPD allocation process will provide more certainty to developers and LSEs about the likelihood of a project receiving a TPD allocation.

It is worthwhile for the CAISO to consider a multi-year interim deliverability allocation process to bridge the gap between the in-service date of any required LDNUs and the project’s requested COD. The CAISO should also consider a multi-year interim deliverability allocation process for ADNUs considering the large volume of upgrades resulting from the Transmission Planning Process over the last several years.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

CalCCA supports the CAISO’s contract and queue management proposals. In particular, CalCCA supports the proposal to offer a one-time withdrawal opportunity and the proposal to enforce time-in-queue requirements for projects in the queue without executed GIAs. These proposals will incentivize lingering projects to withdrawal or move froward in the development process.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

  CPUC staff supports the ISO's zonal approach and its initiative to promote interconnections in transmission zones with approved transmission capacity through the ISO transmission planning process (TPP). However, the ISO should consider a backstop process that can be triggered by stakeholders if a specific zone has not been included in the zonal approach for an extended period, such as for over 3 interconnection request windows. The CPUC’s busbar mapping process should be capturing LSE interest in areas that might not be mapped for transmission capacity expansion – but the CPUC’s busbar mapping process should also curtail transmission upgrades in areas where they are known to be much more expensive than other available areas. 

In addition, the ISO staff should consider the timing of how the availability of deliverability is included in the zonal map. For example, if the expected online date for transmission upgrades is in 10 years and opens 100 MW in that zone, what timeline/interconnection window will the CAISO include this deliverability in? The ISO should ensure a mechanism for adjusting the timing as the reform of the interconnection process shortens the timing for projects reaching deliverability.  

CPUC staff believes that the zonal approach will help to reduce speculation surrounding viability of projects in areas with little to no transmission availability and thus streamline the queue. Long term CPUC staff hopes that narrowing of projects in the study project using the zonal approach, combined with the ISO’s proposed viability criteria, will limit the number of projects being studied to the more viable projects, ultimately expediting the timeline from the initial study process to project interconnection.  

CPUC staff supports the use of the proposed reformed Option B process to allow for the studying of projects where capacity is neither approved nor available. Option B will ensure that due consideration is provided to projects that developers deem viable and are willing to self-fund. Holding the Option B study to the same viability criteria as the Interconnection Study Zonal approach is a sound way to ensure developers can advance viable projects for studying while ensuring the ISO resources are not being expended on projects with minimal prospects of advancement. 

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. 

CPUC staff supports the consideration of LSEs’ procurement activities and requirements as set by the IRP procurement orders. Incorporating LSE input and commitments in the interconnection process will promote the likelihood of success of LSE’s meeting the CPUC Integrated Resource Planning (IRP) procurement obligations. CPUC staff also supports the proposal to incorporate LSE interest in a project before a signed PPA or being shortlisted as part of the criteria for interconnection study request ranking. This approach is consistent with the strategic direction of the CAISO-CPUC-CEC Memorandum of Understanding to strengthen connections between resource and transmission planning, interconnection processes, and resource procurement. 

Some LSE have identified interest areas in their IRPs, which CPUC staff try to consider in the busbar mapping process, however receiving transmission deliverability from these projects can be difficult and LSEs would benefit from these projects being studied in the Interconnection study process. Ensuring areas of LSE interest in projects expressed in their IRP are reflected in the busbar mapping and the zonal approach creates a tighter connection between the IRP process with the interconnection process.  

CPUC staff would be interested in joining the working group to develop the creation of this process.  

b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. 

CPUC staff favors the development of refined criteria for viably to help minimize the reliance of an auction but support the use of an auction as an as-needed backup mechanism to determine the final projects included in zonal studies. 

c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. 

 i. Please indicate interest in participating in a workgroup to refine scoring criteria. 

CPUC staff are interested in participating in the working group to refine scoring criteria.  

CPUC staff, in alignment with AB 1373, also supports a criterion for diverse resources that do not already make up a large quantity of the queue, which would include the IRP’s MTR Long Lead time resources (LLT).  

CPUC staff supports the creation of a criterion to improve alignment with the mapped resources in recent TPP portfolio. This alignment would be particularly significant for the development of diverse resources identified by the portfolios to ensure an adequate pool of such resources enter the study process and/or have a chance of utilizing the transmission planned to support a diverse portfolio of resources. Also, since LSEs’ Integrated Resource Plans feed into the portfolios the CPUC transmits to the CAISO, this criterion could provide an additional avenue of alignment with CPUC jurisdictional LSE interests.  

d. Please provide feedback on auction design and use of auction revenues. 

CPUC staff do not have additional comments at this time.   

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

CPUC staff proposes that the study elements of the straw proposal separate transmission planning and analysis from the rest of the Queue Management reforms. 

The goal and objective of Transmission Planning should be to optimize the delivery of a known generation portfolio to a known peak demand.  Achieving this transmission optimization requires quantitative comparison of a select short list of transmission alternatives, achieved through extensive studies.  Such studies are rooted in power flow, short circuit, dynamic, production cost studies, single-phase studies, and transient studies, to name a few. Economic comparisons via project cost estimates and production cost studies would also be performed in the Transmission Planning and Analysis phase.  

CPUC staff suggests that the transmission planning and analysis be allowed to achieve such technical optimization for the overall public good. 

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

No comments at this time.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? 

No  comments at this time.   

b. Are the updates to the Limited Operation Study sufficient? 

No  comments at this time.   

c. Comments on adding asynchronous generating facility requirements in the SGIA 

No  comments at this time.   

d. Comments on removal of suspension rights 

No comments at this time.   

e. Comments on TPD Transferability proposal 

No comments at this time.   

f. Comments on viability criteria and time-in-queue limit 

  CPUC staff favors an enforced time-in-queue limit to ensure that deliverability is accessible to projects with readiness.  

g. Comments on project Modification updates 

CPUC Staff supports the proposed MMA modifications. 

h. Comments on postings for shared network upgrades 

No comments at this time.   

i. Comments on timing of incorporating MMAs into the GIA 

No comments at this time.   

j. Comments on timing on starting network upgrades  

No comments at this time.   

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

The Public Advocates Office at the California Public Utilities Commission (Cal Advocates) provides these comments on the California Independent System Operator’s (CAISO Interconnection Process Enhancements), 2023 Phase 2 Straw Proposal.? Cal Advocates is an independent consumer advocate with a mandate to obtain the lowest possible rates for utility services, consistent with reliable and safe service levels, and the state’s environmental goals.[1]

Cal Advocates strongly supports the CAISO declaration that the first principle and a central tenet of the CAISO’s interconnection reform is the zonal approach; the prioritization of projects that seek to utilize available capacity and are in zones where there are planned capacity additions approved in the CAISO Transmission Process Plan (TPP), as established in state and local regulatory authority resource planning portfolios.[2]  Given that the CAISO TPP takes a zonal approach to planning for the resources in the portfolio provided by the CPUC, it makes sense to align the resource planning portfolios and interconnection process enhancements.

[1] Public Utilities Code Section 309.5.

[2] CAISO Straw-Proposal-Interconnecton-Process-Enhancements-2023 Track 2, Sept. 21, 2023, p. 12, CAISO Straw-Proposal-Interconnecton-Process-Enhancements-2023-Sep212023.pdf

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU.

The CAISO should incorporate LSEs’ interests and commercial procurement activities earlier in the process by reserving and allocating Transmission Plan Deliverability (TPD) based on available transmission capacity that are either: 1) in zones where TPD capacity exists or 2) where there are planned TPD capacity additions approved in the CAISO TPP.  Developers who can provide a Letter of Intent or a Power Purchase Agreement from an LSE should be allocated TPD in each transmission zone or local capacity area based on the FERC Order 2023 required first ready/first serve principle.

This strategy of prioritizing interconnection applications for resources in zones where transmission capacity is planned or is available is fundamental to Cal Advocates August 15, 2023 interconnection proposal to the CAISO provided with our comments submitted to the Stakeholders Meeting of August 1, 2023.  The Cal Advocates proposal aligns with the CAISO’s Interconnection Process Enhancement (IPE) first principles as follows:

• Aligns LSEs’ resource needs with Resource Developer projects that have executed Power Purchase Agreements (PPAs) with available transmission capacity on a first ready - first serve basis.
• Reduces speculative Interconnection Requests (IRs) by imposing higher study fees and avoiding CAISO studies on projects without executed PPAs.
• Prioritizes interconnection in zones where transmission capacity exists or new transmission has been approved.
• Aligns interconnection and transmission plan deliverability processes with LSE resource procurement functions.

b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements.

The CAISO’s straw proposal, specifically the scoring criteria and auction elements, may conflict with the stated purpose of FERC Order 2023 which requires that interconnection reforms ensure that the generator interconnection process is just and reasonable and not unduly discriminatory or preferential. The CAISO straw proposal recommends development of a scoring methodology that depends on a set of criteria that demonstrates potential project viability.  These scoring criteria would create a process that would be highly subjective on the part of the scorer.  This could lead to a very opaque and non-transparent interconnection priority process, and worst case, discriminatory or preferential. 

The CAISO straw proposal scoring criteria could also lead to manipulation of applications to achieve a high score.  Both the scoring criteria design and validation of the scoring methodology should be studied further by a Stakeholder subgroup in the future.  As discussed, CAISO’s Straw Proposal ould not bring certainty to the interconnection process but perhaps delay studies and hence interconnection agreements.  As the CAISO stated: “the ISO understands, that several criteria may be improbable to expect before the study process (e.g., an executed PPA) ” [1]  The CAISO has acknowledged that there are few proposed projects that would become operational without an executed Power Purchase Agreement with a Load Serving Entity (LSE) that must meet its Resource Adequacy mandated energy and capacity requirements  It is typical that LSEs wait for the CAISO to provide Transmission Planning Deliverability (TPD) allocation to a proposed project before executing a Power Purchase Agreement with a resource developer.[2]  So to base a scoring system on an approach that includes a criteria of having a signed PPA with the expectation that the PPA will never be tendered is confusing.  This problem and other issues with the Straw Proposal scoring criteria should be addressed by a Stakeholder sub-working group.  Given the concerns with the scoring criteria, Cal Advocates recommends the CAISO to consider Cal Advocate’s proposal that allows resource developers to request preapproved and available transmission interconnection capacity at CAISO interconnection zones after the resource developer has obtained a letter of intent or validated PPA with a LSE.

Please see the Cal Advocates alternative proposal submitted to the CAISO on August 15, 2023.

[1] CAISO Straw-Proposal-Interconnecton-Process-Enhancements-2023 Track 2, Sept. 21, 2023, p. 24, CAISO Straw-Proposal-Interconnecton-Process-Enhancements-2023-Sep212023.pdf

[2] CAISO Straw-Proposal-Interconnecton-Process-Enhancements-2023 Track 2, “NCPA (Northern California Power Agency) noted that commercial “criteria such as a Power Purchase Agreement (PPA) letter of intent, RFP shortlist or inclusion in an LSE resource plan might not be generally appropriate for all proposed projects at the time of queue entry.”, Sept. 21, 2023, p.6

c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. Please indicate interest in participating in a workgroup to refine scoring criteria.

Cal Advocates is interested in participating in a workgroup to refine the CAISO’s Straw Proposal.

d. Please provide feedback on auction design and use of auction revenues.

Cal Advocates raises the following issues regarding the CAISO Straw Proposal auction design.  It’s unclear whether the auction mechanism will lead to escalating costs for the generating resources associated with the interconnection application that could lead to higher costs for LSEs contracting for the resource RA.

Also, as specified previously in Cal Advocates comment 2.b. above, the Straw Proposal’s auction design may conflict with FERC Order 2023 which requires that interconnection reforms ensure that the generator interconnection process is just and reasonable and not unduly discriminatory or preferential.  The auction design could lead to an unfair playing field where only developers with the deepest pockets will win the auctions.  That said, Cal Advocates appreciates that CAISO has modified its Straw Proposal such that the auction will only be used if the viability scoring is unable to limit the proposed capacity to 150% of available capacity within each zone.  This design aspect should reduce the impact of the auction if it only impacts a small portion of applicants.

Cal Advocates finds some merit in several aspects of the Straw Proposal’s use of auction revenue, however, it is unclear whether the auction design will escalate the costs of the resources being interconnected.  CAISO proposes the auction will be designed so that projects that successfully compete in an auction and reach commercial operation will be refunded their auction posted security.  And if a project withdraws, or is withdrawn prior to reaching commercial operation, some or all of its auction posted security will be forfeited and used to offset and support still needed network upgrades for the supporting PTO.  Both of these auction design elements make sense, however, the devil is in the detail.  Again, at this time, Cal Advocates does not support the CAISO Straw Proposal scoring criteria or auction design without better understanding the details behind these elements.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

a. Please provide feedback on the modifications to the Option B process.

As stated in the CAISO Straw Proposal there will be projects seeking to interconnect in areas that have no available or planned TPD capacity (i.e. outside of TPP zones).  These projects are eligible to select Option B.  The CAISO states that the Option B path ensures that projects seeking to interconnect in areas with no available deliverability capacity have a path forward.  The CAISO provides the following details for Option B:

1. Option B projects will not have to compete for TPD in the allocation process because the proposed resource projects will trigger and finance all of the delivery network upgrades that they will require, without taking any deliverability from other delivery network upgrades.

2. Option B projects that require Local Delivery Network Upgrades (LDNUs) will be eligible for cost recovery of the Interconnection Financial Security (IFS) posted for the LDNU in the same manner as an Option A projects.

3. An Option B project’s funding of the construction of its required Area Delivery Network Upgrades (ADNU) will not receive repayment.

4. Option B projects will be given a project status of Full Capacity Deliverability Status (FCDS) or Partial Capacity Deliverability Status (PCDS), as specified in its GIA and in accordance with the Resource Adequacy counting rules.[1]

The CAISO’s proposed modifications to the Option B process allows resource developers to create new resources not necessarily in the Joint Agency MOU planned resource portfolio such as new geothermal or out-of-state wind.  It also allows resource developers to plan and construct new transmission facilities by applying to the CAISO as a Subscriber Participating Transmission Owner.  Cal Advocates supports Option B because it protects ratepayers by not increasing the Transmission Access Charge (TAC).

[1] CAISO Straw-Proposal-Interconnecton-Process-Enhancements-2023 Track 2, Sept. 21, 2023, p. 35, CAISO Straw-Proposal-Interconnecton-Process-Enhancements-2023-Sep212023.pdf

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

a. TPD allocation

Transmission Plan Deliverability (TPD) should be allocated based on available transmission capacity in zones where there are planned capacity additions approved in the CAISO TPP.  Developers who can provide a Letter of Intent or a Power Purchase Agreement from an LSE should be allocated TPD in each transmission zone or local capacity area based on the FERC required first ready/first serve principle.  This strategy of prioritizing interconnection applications for resources in zones where transmission capacity is planned or is available is fundamental to the Cal Advocates interconnection proposal submitted to the CAISO on August 15, 2023.

b. Interim Deliverability

“Recognizing transmission development timeframes, the [CA]ISO proposes to construct a methodology to allow multi-year interim deliverability to bridge the gap between the in-service date of a Local Delivery Network Upgrade (LDNU) and a project’s requested commercial online date.”[1]  The inherent difficulty is that the pace of generation development and procurement typically does not align with the pace of transmission development.  The CAISO states that it has approved many new transmission projects in the last two TPP cycles and is committed to facilitating their on-time completion.  But many of these projects will take 8-10 years to plan, permit and construct. 

The CAISO states that it will continue to work with stakeholders in both the IPE initiative and the Deliverability Assessment Methodology initiative to construct a methodology where a multi-year interim deliverability allocation process could bridge the gap between the in-service date of an LDNU and the project’s requested Commercial Operation Date (COD).  The CAISO indicates that the straw proposal would be centered on the use case where a project needs to wait for an LDNU to go into service before it can be deemed deliverable but would go into commercial operation sooner if it could receive interim deliverability on a multi-years basis.  This is a new form of multi-year interim deliverability that would allow a project to seek a TPD allocation earlier in its development process.

Cal Advocates supports the CAISO’s straw proposal on Interim Deliverability which improves the timeliness of bringing incrementally new resources on-line since it will provide a for the benefit to ratepayers.

[1] CAISO Straw-Proposal-Interconnecton-Process-Enhancements-2023 Track 2, Sept. 21, 2023, p. 5, CAISO Straw-Proposal-Interconnecton-Process-Enhancements-2023-Sep212023.pdf

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects?  

Many projects linger in the queue without justification, some as far back as 2003.  Project developers face significant financial commitments, including deposits and financial security postings, so a voluntary withdrawal from the queue could pose financial risk to the projects.  The CAISO states there are few, if any, incentives for projects to withdraw if they can remain in the queue and continue to seek a buyer for the project.[1]  The CAISO proposes to provide a one-time opportunity for projects to be withdrawn from the queue and for project developers to receive any unused portion of their interconnection financial security postings and in-lieu-of site exclusivity deposits.[2] The CAISO proposal would be applicable to all active projects in the queue.

Currently the CAISO requires the Participating Transmission Owner (PTO) to fund certain upgrades, identified as precursor network upgrades (PNUs), that are still needed by the same-or later-queued projects where at least one Generation Interconnection Agreement (GIA) was executed by a withdrawn project and where costs would not cascade to later queued projects still requiring those upgrades.

The CAISO Straw Proposal attempts to share the financing cost burden for the still-needed PNUs among the PTOs and the withdrawing interconnection customer.  As such, the CAISO proposes that the withdrawn project’s previously non-refundable portion of the project Interconnection Financial Security (IFS) that is posted for a still-needed PNU(s) continue to be held and used by the PTO to fund the specific PNU(s).  Once the PNUs are in service, the PTO will refund the withdrawn project’s money to the interconnection customer consistent with the existing reimbursement requirements.

Cal Advocates concurs with the CAISO that this aspect of the Straw Proposal is reasonable and that the one-time withdrawal opportunity sufficiently addresses the assignment of costs of withdrawn projects.  This will improve the queue process and benefit ratepayers by eliminating projects that take CAISO resources just to remain in the queue.

b. Are the updates to the Limited Operation Study sufficient?

Under the CAISO’s tariff for Generation Interconnection and Deliverability Allocation Procedures (GIDAP), projects may request a Limited Operation Study (LOS) five months before the project’s synchronization date.  Currently the CAISO uses short term operations data to perform this LOS study as opposed to long term transmission planning data which limits the amount of time ahead of project synchronization that the CAISO is willing to perform this study.

The CAISO proposes to increase time to submit a LOS request to 9 months before synchronization.  This allows additional time for processing the LOS request, drafting and issuing the LOS study plan, and 45 days to complete the study with the intent of providing interconnection customers additional time to evaluate the results and make project decisions accordingly. 

Cal Advocates supports the CAISO’s Straw Proposal to update time limits to perform the Limited Operation Study.  The extended timeframes allow resource developers to complete new projects in a timely manner to achieve a target Commercial Operation Date for the benefit of ratepayers.

c. Comments on adding asynchronous generating facility requirements in the SGIA

The CAISO states that it has seen an increased deployment of asynchronous resources and has experienced operational issues with a varying size of resources.[3]  Currently, the requirements for large and small generating facilities differ in the operating, recording, and reporting requirements for inverters.  The CAISO seeks to bring consistency for all generating facilities.

The CAISO proposes that for consistency across all asynchronous generating facilities, that the Small Generator Interconnection Agreement (SGIA) – Interconnection Requirements for Asynchronous Generating Facilities be consistent with Interconnection Requirements set out in the Large Generator Interconnection Agreement (LGIA).

Cal Advocates supports the CAISO’s Straw Proposal for adding asynchronous generating facility requirements in the SGIA is reasonable, technically sound, and necessary in order to maintain grid operational reliability.

d. Comments on removal of suspension rights

The CAISO expresses concern that interconnection customers have the ability to use the current suspension provisions to enter the interconnection process with not-ready projects and then use suspension while they attempt to find an offtaker.  In response, the CAISO proposes to remove suspension rights for all projects that execute a Large Generator Interconnection Agreement (LGIA) in the future.

Cal Advocates supports the CAISO’s straw proposal on removal of suspension rights as being reasonable and improves the Queue management to the benefit of ratepayers.

e. Comments on TPD Transferability proposal

The CAISO points out that a project’s financial viability is dependent upon its deliverability/Resource Adequacy.  The CAISO seeks to ensure Transmission Project Deliverability (TPD) transfers are limited only to viable projects for legitimate purposes of right-sizing deliverability among different generating units.

The CAISO proposes that a project transferring its deliverability must withdraw from the queue or downsize its generating capacity to match or be consistent with its remaining deliverability.  The CAISO proposes that if a project is in Partial Capacity Delivery Status (PCDS) and transferring all of its project allocation, the original project must withdraw the entire project from the queue at time of the transfer.

The CAISO states that it recognizes that a single parent company entity may own a number of queue positions interconnecting at the same point of interconnection and may need to request a transfer between those positions to maintain viability and commercial or Power Purchase Agreement status. In these limited circumstances, the CAISO states that it would permit these transfers. However, the Interconnection Customer would first need to demonstrate the validity of the transfer request by providing the redacted Power Purchase Agreement (PPA) that supports a Resource Adequacy (RA) obligation for such end-state deliverability status for the projects and or technology types.

Cal Advocates supports the CAISO’s Straw Proposal on the TPD Transferability proposal as being reasonable, not unduly discriminatory or preferential, and supporting ratepayers access to efficient resource procurement.

f. Comments on viability criteria and time-in-queue limit

The CAISO states that it has tariff and Business Practice Manual (BPM) language limits projects’ length of time in queue.  However, the CAISO states that enforcing these provisions often requires a time-intensive, project-specific review to ensure the project is still in compliance with the CAISO generation interconnection tariff requirements to remain in the queue.  The CAISO proposes to adopt straightforward milestones and universal time-in-queue limitations to help manage older projects and reduce projects lingering in queue without progress.

The CAISO states that it intends to clarify the commercial viability criteria language to specify the time an interconnection customer has to submit a PPA to allow the project to utilize the one-year limited exception to provide such PPA and retain deliverability.

The CAISO straw proposal would impose a time-in-queue requirement for all projects in the queue without an executed Generation Interconnection Agreement (GIA).  These Interconnection Customers would need to execute an interconnection agreement and subsequently provide notice to proceed the third financial security posting, as described in provided tables provided in the straw proposal.[4]   The CAISO states that this finite time-in-queue proposal ultimately places a financial obligation on the project if it desires to remain in the queue.

Cal Advocates supports the CAISO’s Straw Proposal on viability criteria and time-in-queue limit in order to reduce the number of projects in the CAISO interconnection Queue improving CAISO resources used for this task and lowering costs to ratepayers.

g. Comments on project Modification updates

The CAISO and the project developers use a process known as Material Modification Assessment (MMA) to enact any changes to the project terms and conditions in their Interconnection Request (IR) or their GIA.  The CAISO states that the increase in the volume of modification requests has become challenging to manage and that the CAISO must reduce the number of modification requests to a workable level.  Currently, projects submit multiple MMA requests for equipment, technology, and configuration changes prior to execution of the GIA and after execution of the GIA through their Commercial Operation Date (COD).  As part of its IPE Straw Proposal, the CAISO is seeking to reduce the pace and volume of modification requests.

The CAISO has proposed the following updates to the MMA and post-COD modification processes:[5]

• Increase deposit to $30,000;
• Increase time to complete engineering analysis from 45 days to 60 days; and
• Increase time to complete the Facilities Reassessment Report (FRR) from 45 days to 60 days.

The CAISO proposes process updates that the CAISO’s Queue Management team will work on to enhance the overall modification processes as follows:

1. Work to host modification calls between the CAISO and PTO engineering teams and the interconnection customer following the second or third validation turn.

2. Coordinate with the PTOs to improve the initial and subsequent validation reviews for modification requests.

3. The CAISO and PTOs will work to identify specific milestones such as executing the GIA or providing notice to proceed in the modification results.

4. The CAISO proposes to update the CAISO Best Practice Manual (BPM) for Generator Management (Section 6.2.1.4) that projects must have started construction and be within six months of achieving their then-current synchronization or commercial operation date to submit a construction sequencing delay request.[6]

Cal Advocates supports the CAISO’s Straw Proposal to limit project Modification updates as being reasonable, allowing the CAISO to clean up the CAISO interconnection queue, improving CAISO resources used for this task, and lowering costs to ratepayers.

h. Comments on postings for shared network upgrades

Interconnection Customers (ICs) have raised numerous concerns that the PTOs are not meeting the transmission upgrade milestone dates. ICs believe one of the reasons for the delay in starting transmission upgrades is that multiple projects are required to financially fund the same shared network upgrade.  In some instances, the PTOs are waiting until all or the majority of the interconnection customers responsible for the shared network upgrade have provided their Notice To Proceed (NTP).  A consequence of this is that when one a project that is ready to be operational becomes delayed because the PTO is waiting for the NTP from all parties.

The CAISO agrees with stakeholders that if one interconnection customer is ready to proceed with construction of a shared network upgrade then all participants in that upgrade must post the needed security for and fully fund that upgrade as applicable.  This should occur regardless of their deliverability status or whether they have executed a GIA.

For projects that have already executed GIAs, the CAISO supports the PTOs requiring security from all shared network upgrade interconnection customers when the first customer provides a notice to proceed and the upgrade needs to be funded for construction.

Cal Advocates supports the CAISO’s Straw Proposal on postings for shared network as being reasonable and prudent.  The proposal would improve the timeliness of bringing new projects on-line for the benefit of ratepayers.

i. Comments on timing of incorporating MMAs into the GIA

With numerous MMA process revisions to projects, PTOs, and CAISO are required to continually amend the GIAs.  The CAISO states that trying to keep up with a high level of project changes (378 to date) is time consuming.

The Straw Proposal specifies that amending the GIA will wait until close to the time the generation project is set to synchronize to the grid.  Doing so will facilitate inclusion of the final or near-final configuration in the GIA.  The CAISO proposes to effectuate the GIA amendment, the MMA report would be controlling even when the GIA amendment hasn’t been executed yet.  The CAISO proposes that all modifications would be incorporated into the agreement nine months before the synchronization date in the GIA.

Cal Advocates supports the CAISO’s straw proposal’s timing of incorporating MMAs into the GIA as being reasonable and prudent. The proposal would improve the timeliness of bringing new projects on line for the benefit of ratepayers, while lowering CAISO resources spent on project management.

j. Comments on timing on starting network upgrades

CAISO states that Interconnection customers are concerned that once a notice to proceed (NTP) is provided to the PTO, it may be months before the PTO actually starts engineering, design, or project management of the network upgrade.[4]   This can result in the network upgrade being delayed from the original online date in the GIA.  This then could force the Interconnection Customer to be delayed in meeting the timelines in their PPA, resulting in financial penalties for the Interconnection Customer.

The CAISO agrees with concerns raised by the Interconnection Customers.  The CAISO agrees that a specific date for the NTP must be included in the GIA.  If an MMA modifies the NTP date then the new date will be included in the MMA report which is then an amendment to the GIA.  The CAISO also states that it agrees with the Interconnection Customers that the PTOs need to move forward once the NTP and third security posting is received and meet the Initial Synchronization Date in the GIA to allow Interconnection Customers to meet their PPA requirements.  The CAISO proposes that the GIAs have specific dates for NTP and third posting. This will result in milestones that can be specifically tracked.  The CAISO also proposes that a new milestone be added requiring the PTO to notify the Interconnection Customer and the CAISO when activity has begun on the network upgrade and interconnection facilities.  This should provide transparency as to when the upgrades are started and open communication among the parties to ensure that transmission is being built within the terms and conditions of the GIA.

Cal Advocates supports the CAISO’s Straw Proposal on timing for network upgrades as being reasonable and prudent. The proposal would improve timeliness of bringing new projects on-line for the benefit of ratepayers while lowering CAISO resources spent on project management.

[1] CAISO Straw-Proposal-Interconnecton-Process-Enhancements-2023 Track 2, Sept. 21, 2023, p. 44.

[2] CAISO Straw-Proposal-Interconnecton-Process-Enhancements-2023 Track 2, Sept. 21, 2023, p. 45.

[3] CAISO Straw-Proposal-Interconnecton-Process-Enhancements-2023 Track 2, Sept. 21, 2023, p. 46.

[4] CAISO Straw-Proposal-Interconnecton-Process-Enhancements-2023 Track 2, Sept. 21, 2023, p. 54.

[5] CAISO Straw-Proposal-Interconnecton-Process-Enhancements-2023 Track 2, Sept. 21, 2023, p. 60.

[6] CAISO Straw-Proposal-Interconnecton-Process-Enhancements-2023 Track 2, Sept. 21, 2023, p. 56.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

Overall Comments on Straw Proposal

As the template does not provide a space for feedback on the Straw Proposal overall, CalWEA first provides that feedback here. 

A fundamental weakness of the Straw Proposal is that, in dramatically scaling back the number of projects that will be studied, the proposal attempts to score the viability of projects without a key piece of information that is essential to determining projects’ viability:  interconnection costs and timing.  Without that information, only the most deep-pocketed developers interested in risk-taking will make substantial investments in a potential project, such that they will be able to show the indicators of progress reflected in the scoring criteria.  As noted on p. 20, PG&E and Sonoma Clean Power commented that LSEs will not be able to meaningfully provide their interest in projects without sufficient information to understand potential network upgrade costs and timelines that determine the ultimate cost to utility customers and the ability of a resource to meet RA online date requirements.  The Straw Proposal leaves the details of many elements of the scoring criteria to later workgroups, i.e., CAISO has not yet determined whether the “clear and verifiable” scoring criteria that it promises can be realized and whether that scoring will produce a significant number of projects to proceed into the study group.

Because essential information on transmission costs and timing will be missing, CalWEA is skeptical that a meaningful scoring rubric can be developed that will produce sufficiently viable projects in most or all zones.  Instead, few projects are likely to score well (since few will have true indicators of viability) and proceed with studies and, therefore, either (1) projects with questionable viability will move forward on an arbitrary basis over other projects that may have more desirable characteristics, or (2) many projects will tie or fail to meet a minimum required score and will then be subject to a costly auction that will favor the most deep-pocketed developers.  At the very worst, the rubric is likely to invite gaming. 

These problems are compounded by the difficulty inherent in attempting to accurately determine zonal capacities, discussed below. In addition, calculating available zonal capacity for any queue cluster will depend on the status of earlier-queued projects, which will not be sufficiently known at the time of zonal capacity calculations.

Finally, but essentially for location-constrained resources such as onshore and offshore wind, the Straw Proposal would constrain these resources to zones with pre-existing transmission capacity, even when there are few or no resources available in these zones, effectively shutting out some location-constrained resources from the open-access process, even when these resources are needed to meet the CPUC’s Preferred System Plan and LSEs’ portfolio goals.  Constraining studies to projects in zones with available transmission capacity will also drive up the cost of land (and thus supply prices) for projects in those zones and will fail to send signals to CAISO and the CPUC about promising new resources areas. 

Please see the attached supplemental comments on the weaknesses of the Straw Proposal.

In contrast, CalWEA’s reform proposal – which the CAISO did not address in its Straw Proposal or seriously discuss in stakeholder meetings – would achieve the goal of thinning the queue without raising the cost of entry and favoring deep-pocketed developers.  It would do this by providing reasonable interconnection cost and timing information up front, at a nodal level, derived from Phase 1 studies that would be conducted similarly to CAISO’s TPP studies for policy upgrades and applied as proxy costs for all interconnection customers. CalWEA’s proposal would also enable more accurate accounting of offtaker interest in queued projects as proxy cost information would be shared with them, allowing them to make meaningful assessments of the commercial viability of projects.  CalWEA’s method would require that the time between Phase 1 and Phase 2 studies be extended beyond the current 90-day period to potentially six months but would enable all interconnection customers to be fairly considered rather than be rejected on an artificial and arbitrary basis.  As CalWEA noted in making its proposal, however, it would also require location-constrained resources to be exempted from any scoring mechanism that limits project locations to CAISO-selected study zones.

For these reasons, CalWEA makes the following recommendations:

• As CAISO and workgroups attempt to develop meaningful scoring criteria and accurate zonal information, CAISO and stakeholders should also consider CalWEA’s proposal on a parallel path.  Once each path is more fully considered, the preferable path should be determined.  Any scoring criteria developed by the working group could be applied under CalWEA’s approach, which calls for viability scoring for projects before they enter Phase 2 studies (with the benefit of transmission cost and timing information). 
• Under either approach, location-constrained resources such as onshore and offshore wind should be designated as Option A areas when there are enough interconnection applications (>500 MW) in a location-constrained resource area and where the resources are needed to fulfill the CPUC’s Preferred System Plan (PSP) or LSE plans.
• If more time is needed, CAISO should put IPE Track 2 on hold and proceed with QC15 to ascertain the impact that CAISO’s new site control requirements and FERC’s additional entry fee and study deposits required under Order No. 2023.  We expect these stringent requirements to considerably thin down the queue.

Comments on Question 1

To inform developers on the zones where transmission capacity is available, CAISO plans to develop a heat map and associated information, as required under FERC Order No. 2023, and “will work to ensure consistency of single line diagrams for each of the transmission zones and transmission interconnection areas in the generation interconnection process. The diagrams will identify the boundaries of the zones/area, location of resources in the portfolios and the queue, the affected stations and the available TPD for allocation behind each of the transmission constraints.” (p. 18.)

The problem with this approach is that zonal capacity is neither clear-cut nor static, so there is no simple capacity number for each zone: 

• Zonal capacity will be defined per transmission constraint, i.e., generation pockets or a 5% or 10% generation circle around deliverability-constrained flowgates.  But gen pockets typically overlap, may lay inside a zone, or cross the zone boundary.  Gen-pockets may not align with the zonal boundary.
• Inside the same zone, some locations (buses/nodes) are behind multiple constraints while others could be constraint-free.
• Within the same gen-pocket, connecting at different POIs will have different impacts (shift factors on the transmission constraint will differ). The deliverable generation capacity depends on the specific locations of the generators being considered.
• CAISO plans to apply an artificial capacity for POIs without any known constraints.  Furthermore, if projects show up at any “favorable” location (zone or bus), they will impact, almost always adversely, all other “favorable” locations.
• CalWEA understands that automatically including all LRA-approved preferred resources of non-CPUC jurisdictional LSEs in the study group addresses the concerns of those entities summarized on p. 18, and we share the concerns raised about not studying resources outside of zones with TPD capacity.  However, providing non-jurisdictional utilities automatic placement of their preferred resources in all zones provides undue preference over jurisdictional utilities.   (The fact that zones have been designated by the CPUC does not necessarily equate to the preferences of jurisdictional utilities, which may include location-constrained resources outside of these zones, and the preferences of all jurisdictional utilities likely could not be accommodated in many zones.) CalWEA’s reform proposal provides a better solution to the concerns of the non-jurisdictional utilities.

Therefore, even with the information provided by CAISO, it may be difficult for an interconnection customer to determine whether capacity is available at a particular POI. 

Partly because of these uncertainties, if CAISO moves forward with this proposal, it should raise the study group in each zone from 150% to at least 200% of the capacity for each zone to account for approximations, interactive effects, and uncertainties.  This will help to ensure that the intended amount of capacity will survive the process such that the market is not excessively constrained, and LSEs have some opportunity to select from competing resources (although the Straw Proposal will still inherently and dramatically limit their options).

In addition, it will be important to determine, at the outset, when (to which queues) TPP capacity additions will be applied, and how much TPD capacity will remain available after prior queues. CAISO is going to modify the study process to single phase per FERC Order 2023. CAISO should provide a detailed timeline for the study and coordinate the studies with TPP such that the transmission upgrades approved through TPP immediately benefit the new queue cluster. CAISO should also make transparent how the prior queues will be treated when determining available zone capacity, e.g., will transmission capacity be reserved for parked projects before being available for the new queue cluster?

Finally, as noted under Q1, the Straw Proposal could shut out diverse, location-constrained (i.e., non-solar/battery) resources even when these resources are needed to meet the CPUC’s PSP and LSEs’ portfolio goals.  If these resources are needed for the PSP, or if LSEs designate these resources as needed, such resources should be designated as Option A areas where there is a sufficient quantity (>500 MW) of interconnection applications in a particular area, regardless of whether TPD capacity is available for a zone. 

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU.

As discussed above under Q1, under the Straw Proposal, LSEs will not have the network upgrade information they need to determine total costs to customers and the ability of a resource to meet RA online date requirements.  Therefore, it will be uncommon to find definitive LSE interest in projects at the time of project scoring, let alone earlier in the process.

b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements.

As discussed under Q1 and the previous and next sub-questions, absent information on necessary transmission upgrades, it will be difficult or impossible to devise scoring criteria that are “clear and verifiable” and that will produce the identified amount of capacity to advance the study group.  This will lead to the need for an auction to allocate the right to be studied for any excess capacity in a zone after applying the viability criteria or to break a tie. (Given the vague, arbitrary, and imprecise nature of the scoring criteria, it would only be fair to include projects across a range of scores in the auction, not just two with the same score.  However, if the number of tied resources is limited, the studied capacity should be raised above the study limit to accommodate all tied projects.)

Conducting an auction would be complicated and onerous and would favor the most deep-pocketed developers who may be seeking a corner on the market given the limited number of projects that would be studied under the Straw Proposal. Given the lack of critical transmission information to inform an auction bid, placing bids that are refunded only upon commercial operation will be risky. Thus, only the most deep-pocketed developers willing to take risks will participate and prevail in the auction.  The costs of this risk-taking, combined with more limited market options, will be passed onto consumers. This is an undesirable circumstance compared to LSEs receiving transmission cost and timing information for all available projects, and then indicating interest in projects on a complete-information basis, as would occur under CalWEA’s reform proposal.

c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. Please indicate interest in participating in a workgroup to refine scoring criteria.

As indicated in our comments under Q1 and the previous sub-question, it will be difficult, and likely impossible, to develop non-arbitrary scoring criteria (beyond the site control requirements already in effect) that will produce enough projects to subscribe the study group absent information on interconnection costs and timing. Interconnection information is necessary to enable developers to move forward with project development (such as initiating and progressing under CEQA review) and to allow LSEs to discern total project costs and online dates that would enable short-listing, let alone PPAs. As a result, the likely outcome will be that most studies will be performed based on auction results from a very limited pool of deep-pocketed developers.  For these reasons, CalWEA recommends against the Straw Proposal approach.

If the Straw Proposal nevertheless moves forward, however – and because a scoring approach would also be needed under CalWEA’s proposed approach (which would benefit from transmission cost information being known to all parties in advance of scoring) – we offer the following recommendations on the scoring methodology.

First, to ensure that the relatively few location-constrained resources in the queue are studied, CAISO should exempt these resources from the scoring criteria and designate such resources as Option A areas to be studied if they are included in the CPUC’s PSP or if LSEs designate them as needed, where there is a sufficient quantity (>500 MW) of interconnection applications in a particular area, regardless of whether TPD capacity is available for a zone. 

Comments on each of the proposed scoring criteria elements are as follows.

Commercial Readiness

• Subsume “Letter of Interest” under “Commercial readiness”.  Letters of interest and shortlist positions are comparable indicators (especially because some shortlists are not so short and do not necessarily indicate an intent to negotiate).  Including “Letter of interest” as a separate criterion could invite gaming, where projects with shortlist positions also obtain a letter of interest.
• Status as a “preferred resource in an LRA-approved LSE resource plan” should be eliminated, as most, if not all, resources will meet that criterion.
• Executed PPAs should be required for a minimum of 10 years.  10 years is required to satisfy RPS and MTR requirements, and few, if any, new projects will be built without a 10-year term.  At a minimum, a 10-year term should earn more points than a 5-year term.
• Commercial readiness should be worth considerably more than a maximum of 50 of 240 total points (21%).  CalWEA suggests a maximum award of 40-50% of total points.  A position on a shortlist, and especially an executed PPA, reflects all other criteria as LSEs will have conducted at least some due diligence on the viability and value of a project.
• Distinguish among executed PPAs based on early termination rights. Given the lack of available information on transmission costs, most, if not all, PPAs will include the right to terminate the contract when that information becomes available if those costs are higher than agreed upon. (CalWEA’s proposal addresses this circularity problem.)  However, any contracts that do not have early termination rights should be awarded substantially more than the 20 additional points suggested in the proposal.
  • CalWEA suggests that three tiers be created for “executed PPAs”.  The first, and lowest-scoring, tier would be for contracts that include termination rights based on transmission upgrade costs and separate early termination rights for other contract elements (other than events of default).  The second tier would be for contracts that include early termination rights only based on transmission upgrades costs.  The third, and highest-scoring, tier would be for contracts with no early termination rights (other than events of default).  ICs would attest to the terms and attach the contract.

Permitting Status

• “Indications of community support” is unlikely to be meaningful and the few points proposed for this criterion is not worth the due diligence that would be required to determine meaningful levels of such support.

Project Attributes

• The criterion that a project “Meet the requirements of a current CPUC procurement order or non-jurisdictional LSE’s Request for Proposals” should be eliminated, as (presently) it would eliminate RPS-eligible projects, or projects that would fulfill the CPUC's PSP, that do not qualify under CPUC procurement orders aimed at meeting Resource Adequacy requirements.  (Wind- and solar-only projects are ineligible under the CPUC’s mid-term reliability orders but will be necessary to charge eligible storage capacity.)  The CPUC may, or may not, issue broad procurement orders in the future; instead, it could rely on long-term procurement guidance with procurement orders focused narrowly on specific resources.

Project Location

• It is not clear how points could be awarded for not triggering ADNUs before the studies are done.

Expansion on an Operating Facility

• This criterion should be worth a fraction of the points earned from a firm, executed PPA (the proposed scoring suggests it would be of nearly equal value).  Project expansion doesn’t necessarily translate to higher viability; the project still needs an offtake agreement and might trigger network upgrades.  Any permitting advantages would be recognized in the permitting criterion.

d. Please provide feedback on auction design and use of auction revenues.

See response to question 2.b, above.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

The Option B process, under which projects pay for network upgrades with reimbursement for ADNUs only through congestion revenue rights (CRRs), has been in effect since 2014, but has never been used.  Therefore, Option B, which may now also need to meet a minimum viability score, is not a meaningful option.  Meaningful open access will require replacing the zonal approach with one that provides meaningful information on upgrades costs and timing to all ICs prior to Phase 2 studies.

Option B projects should be allowed to compete for a TPD allocation because TPD could become available due to load changes, generator changes and other system condition changes.

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

a. TPD allocation

It is premature to discuss TPD capacity allocation at this time.  However, CalWEA disagrees with CAISO’s proposal to prevent Energy Only projects from re-seeking TPD allocations unless they have achieved COD (Group C).  If an EO project has obtained a PPA or is shortlisted, there is no reason that it should not be allowed to re-seek TPD allocation through Options A or B.  These projects could be more viable than newer projects and should not be arbitrarily excluded from the TPD process.

b. Interim Deliverability

CAISO proposes to construct a methodology for multi-year interim deliverability between the in-service date of an LDNU and the project-requested COD.  Please clarify whether this will be accomplished in the deliverability reform initiative or IPE-2.  Also please clarify why only the LDNU service date is specified.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

CalWEA reiterates the comments that we made in August:

We believe that the Queue Management Initiative should be completely reconsidered. The specific measures suggested by Queue Management for managing the projects that have already completed their studies imply that such projects stay in the queue and request MMAs for frivolous reasons rather than to address real business needs as developers seek to advance their projects.  And the solutions offered by QM appear to be intended to limit the activity of such projects simply to reduce the workload on CAISO and PTO staff as opposed to innovatively solve the real problems that real projects are facing.  For example, measures such as limiting the lifetime of a project in the queue to seven or 10 years from the date of interconnection application seems to forget that transmission upgrades identified as part of interconnection studies these days often require construction periods that far exceed 5 years (sometimes as long as 10 years), and that construction would at best start three or more years after the interconnection application has been accepted by the CAISO. 

In short, CalWEA finds queue management reforms to be distracting and recommends that all QM proposals be reconsidered as part of a proceeding separate from the 2023 IPE. 

We offer a few additional specific comments on subquestion b, below.

b. Are the updates to the Limited Operation Study sufficient?

Allowing LOS 9 months before synchronization still provides insufficient time. If CAISO couldn’t provide a multi-year operational study even for information only, CAISO should at least reinforce operational short circuit assessments in the current Phase II study and annual reassessment study across all study areas in a consistent manner. (SCE provides SCD generation sequencing implementation studies, which are operational SCD assessments. Other PTOs don’t. It is a tariff requirement that Phase II studies “Coordinate in-service timing requirements based on operational studies in order to facilitate achievement of the Commercial Operation Dates of the Generating Facilities.”)

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

Calpine fully supports the development and sharing of transparent data on system capabilities and preferred development locations.  While the Straw Proposal identifies sources of data, it would be very helpful to have a workshop focused on gathering the disparate sources and synthesizing them into useful information.  We encourage the CAISO to move as quickly as possible to develop the “heat maps” required by Order 2023.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

a) The Straw proposal incorporates both the CPUC base case (38 MMT) portfolio and the sensitivity (30 MMT) portfolio into the bus bar modeling.  These aspirational goals represent the regulators’ interest in development – the appropriate precursor to LSE interest.  That said, unless the costs of interconnection are made irrelevant, perhaps through broad socialization, a rational buyer will need to know the costs of interconnection before making purchasing decisions.  In essence, we cannot see how one can place the cart (a PPA) in front of the horse (the interconnection process).   

b) Conceptually, Calpine finds the concept of “scoring criteria” attractive and supports the suggestion to have workshops to further explore and define both the metrics and the scoring.  We appreciate the intention of the scoring metrics to separate viable and not-viable projects while recognizing that the suggestions identified in the Straw Proposal are only the first step in an iterative process.

That said, Calpine is not yet convinced that all the initial draft scoring criteria can be objectively or conclusively evaluated. For instance, several metrics relate to generic indications of interest are outlined (from an LSE or a community) but not defined. Such broad and undefined metrics might leave room for generic, non-binding commitments that do not support a clear conclusion of project viability.  

Additionally, Calpine is curious as to whether the scoring criteria would create a significant distinction between potentially  viable and not viable interconnection requests. For instance, it is unlikely that any proposals would be awarded points under the “Commercial readiness” criteria because the requirements (e.g., shortlisted, or negotiated a term sheet or PPA) cannot be met before an interconnection request is submitted.

If the metrics do not create a substantial spread in scoring, it is likely that the auction will be the ultimate arbiter of which projects are included or removed from the cluster study.  If the auction process becomes a frequent occurrence, it may create additional uncertainty for developers while unintentionally creating a skewed secondary market for transmission rights, where prices are distorted by speculators that have no intention of pursuing development.  Perhaps some version of the metrics could be converted into requirements for IR submission to reduce reliance on the auction mechanism.

Finally, the Straw Proposal suggests that the prospective cluster studies be limited to 150 percent of the available deliverability in a zone.  Calpine seeks more information on the reasonableness of this limit, particularly in areas with smaller availability and large competing interconnection requests. 

c) In general, scoring based on things like site control, ability to perform/track record and financial capability are reasonable metrics and make sense. However, scoring an interconnection customer’s request based on having a submitted and/or approved use permit will likely reduce the applications received but will create challenges related to cost but more acutely with respect to timing. Use permits generally expire if the project has not begun construction within a certain number of years (usually two to five years). Without understanding the IF/NU timelines, it may be difficult to submit permits prior to submittal of an interconnection request and receipt of at least a Phase I study.

      i) Calpine is willing to participate in a workgroup for this purpose.

d) The CAISO proposes a market-clearing, sealed-bid auction. Auctions could clear at different marginal offers in every zone. Winning bidders would post at-risk deposits which would only be refunded if the project achieves commercial operation. 

Conceptually, Calpine is open to the process suggested by the CAISO but wants to better understand the design and intent.  Assuming that the at-risk dollars are significant, entities that win the auction would have substantial incentives to continue to operation. Does the CAISO have in mind some framework for auction bids? Without understanding the extent of the required Interconnection Facilities upgrades that will be required for a project, it may be difficult to understand how much capital to put at risk for an auction bid. Perhaps the CAISO could compare and contrast other forms of auctions (e.g., descending clock auction).

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

If the CAISO places restrictions on which interconnection requests it will accept for study, open access principles demand that there must be an alternative path to interconnection. It appears that Option B – with its non-refundable network upgrade (ADNU) exposure – appears to be that alternative path.  While it seems unlikely that any party could accept the risk and cost of long-dated and expensive ADNU facilities, there may be circumstances where this path is workable.  As such Calpine does not object to the Option B modifications. 

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

a) No comments.

b) Calpine supports further development and consideration of a long-term interim deliverability product.  The risks of annual (rather than long-term interim) allocations of deliverability forestalls project contracting and rational planning. 

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

a) First, Calpine supports the proposal to allow a one-time withdrawal of historic IR requests.  This security-deposit amnesty could result in several projects – energy-only, FCDS or PCDS – withdrawing, thereby creating more certainty for later-queued projects. In fact, the current queue has nearly 100 projects representing 22,500 MW that are either energy-only or partial deliverability.  Today, the possible forfeiture of some portion of their security deposits might rationally cause those entities to stay in the queue in hopes of securing future allocation of deliverability and a PPA.  Security-deposit amnesty could allow them to exit immediately. 

Second, we fully support the CAISO’s observation that cascading the costs of network upgrades associated with withdrawn projects to later queued projects would be unfair and unjust. 

Finally, we agree that conversations about the funding of the amnesty-driven cascade of network upgrade costs with the TOs should continue.  Ultimately, the costs of these used and useful upgrades would be included in rate-base – the only question is when.  Under the current tariff, the TO would typically refund the cost of the upgrades over a five-year period, each year increasing their rate base.  The only difference between the CAISO withdrawal proposal and the current process would be the time-value of money in the interim. Perhaps, rather than holding the full security deposit for incomplete network upgrades, the CAISO could withhold just the interest (at the FERC rate) on the declining balance of the 5-year refund amounts.

b) Calpine continues to support the change to allow LOS studies 9 months in advance.

c) No comment.

d) Will there be a mechanism available to otherwise viable projects that are delayed by, for example, changes in market conditions or equipment supply or regulatory requirements?

e) No comment.

f) Calpine sees one aspect of the time-in-queue proposal as viable.  That is, since the IC has full control over the submission of a higher (100 percent) security deposit, a time-certain submission may be appropriate.  A date-certain for those deposits, when combined with non-refundability conditions, creates another important decision point on project viability.  Indeed, viable projects may not have any concerns with additional deposits and questionable project may withdraw.

However, fixed dates on a Notice to Proceed and the execution of an LGIA are often beyond the control of the Interconnection Customer.  In fact, exigent circumstances – such as supply-chain disruptions and other external factors – often interfere with issuance of an NTP. In addition, there are over 430 projects in the current queue (excluding C15) that have not executed LGIAs.  In Calpine’s experience, LGIA execution is largely dependent upon timely responses from the TO and forcing an IC to withdraw because of the absence of responses from a TO would be unjust.  With over 400 yet to finish, establishing a hard deadline on LGIA execution seems unreasonable. 

g) Calpine would like to understand how  delays caused by a PTO or CAISO failing to adhere to the specific timeline will be managed.  We suggest that delays outside of the control of the IC not result in a negative impact and be addressed accordingly.

h) No comment.

i) It seems reasonable to only update the LGIA closer to COD when the results of any and all MMA requests have been approved. 

j) No comment.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

The California Energy Storage Alliance (CESA) appreciates the opportunity to provide comments on the 2023 Interconnection Process Enhancements Track 2 Straw Proposal.  CESA supports the ISO providing additional information as early as possible so interconnection customers can fully consider prior to submitting an interconnect request into a transmission zone. 

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

CESA opposes the 25% developer cap as proposed.  The proposed cap was not discussed and vetted in the working groups.  Additional information on the objectives of the 25% developer cap, including underlying analysis of the necessity of such a cap, as well as further discussion on how the cap will be implemented and enforced – are all crucial steps before a transmission capacity cap of any size can be considered.  CESA further notes that the ISO was unable during the conference call to estimate the MW size of the cap. Lastly, CESA seeks clarity if the CAISO intends to apply the 25% cap to cluster 15. 

CESA supports the ISO establishing a sub-working group to further develop the scoring criteria.  Given the ISO plans to develop and present a draft final proposal within the next six weeks, a small sub-working group may be the only approach to develop a workable proposal in such a short timeline.  Overall, the scoring criteria must be sufficiently robust and granular so that the auction process or other mechanism to break ties is not triggered on a regular basis.  CESA is interested in participating in the workgroup to refine scoring criteria.

The MOU states that “the CPUC will provide direction, to the extent appropriate, to pursue resources with the operational characteristics and geographic locations consistent with the resource planning conducted by the CEC and CPUC, and the transmission planning conducted by the ISO based on that resource planning.”  As such LSE interests and commercial procurement activities will be focused on resources within the study transmission zones. CESA agrees with prior comments that additional indications of LSE interest provide little differentiation between the viability of projects given the CPUC portfolio must be achieved to meet state policy objectives and such interest will most likely be non-binding since costs and timing are uncertain.  However, LSE interest should play a larger role in queue management and TPD deliverability process.

The benefit of an auction is to allocate scarce resources and provide price discovery of the value of the scarce resources.  Since the design just considers resources with tied viability scores, the price formation ignores the willingness to pay of all resources seeking to submit an interconnection study request in the transmission zone. CESA has numerous questions on the proposed design of the auction and its applicability as a tie breaker.  CESA believes the difficulty with using an auction as a tie breaker is how the marginal resource is impacted when its full requested interconnection quantity cannot be supported. 

Using the straw proposal (Slide 25) example of 266MW of available transmission capacity, the study capacity for the zone would be 400MW.  The example has been modified as follows:

Project C 150MW Bid price = $5.00

Project D 40MW Bid price = $4.00

Project E 100MW Bid price = $3.00

The clearing price is $3.00.  Does Project E have to reduce its interconnection request to 10MW?  Given site control requirements, if Project E is no longer viable at 10MW can the interconnection request be withdrawn, and no auction posting made?  If Project E is allowed to withdraw, do Project D and Project E still submit an auction posting and at what price?

Assume there is another project, Project H, that also has a viability score of 60.  Its capacity is only 10MW with a bid price of $2.00?  If Project E is allowed to withdraw, this would allow Project H to clear the auction, but the price would be reduced to $2.00.  If Project H was not allowed to clear the auction, this would leave transmission capability that could have been used to study the project.

Now assume that Project E’s interconnection request is only 15MW.  Does Project E have to reduce its interconnection request to 10MW?  However, the remaining 5MW would not cause a material increase in the study capacity of 400MW.

Next assume Project E’s bid price is $4.00.  This results in a clearing price of $4.00, but how are the MW awards determined between Project D and Project E?  If the 50MW is split pro rata, Project D would be reduced to 14MW and Project E to 36MW?  What if Project D or Project E are not viable at the adjusted MW quantity, are they allowed to withdraw?  If withdrawals are allowed, what if Project E withdrew, would Project D be able to return to its original 50MW interconnect request quantity?

CESA believes a better outcome is to develop a granular viability scoring criteria and to the extent there are ties upon reaching the 150% study cap accept all the projects.  This approach will still limit the study quantity of the zone, but without the added complexity of studying exactly 150% of the zone’s capability.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

CESA believes the ISO should allow projects that did not pass the viability criteria to be included in a given zone’s TPD deliverability study (Option A) to elect to self-fund additional transmission upgrades to be included in the queue cluster as Option B.

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

a. No comment. 

b.  In the Generation Deliverability Methodology initiative, the ISO introduced the concept of “conditional” deliverability to allow earlier COD for projects requiring upgrades for N-2 contingencies or whose network upgrades have been delayed by the PTO.  In this initiative, ISO introduced a new “multi-year interim” deliverability to bridge the gap between in-service date of LDNU and requested COD.  However, ISO staff during the stakeholder call cautioned that there may be very limited opportunities to award multi-year interim deliverability.  The ISO should consolidate these efforts and develop a clear proposal with necessary details including an analysis to quantify the amount of deliverability that can be made available to bridge earlier COD to completion of transmission upgrades.  The new “bridge” deliverability must enable contracting between load serving entities and developers. 

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

a - c.  No comment.

d.  CESA does not support the ISO’s proposal to remove suspension rights for all projects that execute an LGIA.  CESA supports proposing language to limit suspension rights to more specific circumstances or for more limited durations rather than removing them altogether.  

e.  CESA opposes TPD transfers that require the transferring project to withdraw. CESA questions the concern that TPD will become a tradable commodity given the proposed viability scoring criteria to enter the queue and the study limit of 150% zone’s transmission capability.  The ISO should maintain flexibility in TPD transfers to ensure that developers can contract to convert projects with assigned TPD into projects that can reach COD.

f – j.  No comment.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

Provide cost and timeline data upfront

As discussed at the September 28 stakeholder meeting, providing sufficient data upfront is a necessary precondition for the interconnection process reforms the CAISO is proposing. Developers need clarity ahead of time (with sufficient lead time prior to the opening of the interconnection request window) on the precise geography of transmission zones and how much capacity is available at each substation, line, and voltage. Developers need this information before they can secure site control and make significant investment decisions to commit capital to interconnection requests.

As part of the data release, Clearway encourages the CAISO to include information on the estimated cost ($/MW) and timeline when the identified capacity will be available. The CAISO could produce these cost and timeline estimates by conducting a simplified study process with a set of generic resources, based on resource portfolios identified by state agencies and LSEs. These would only be estimates and would be refined later in the study process once individual projects are identified, but it would produce very useful information that would allow developers to direct their efforts to projects that are likely to succeed and are aligned with their timeframes for investment.

Include both deliverable capacity and interconnection capacity for each zone

The Straw Proposal suggests that the zonal data would only identify expected deliverable capacity, rather than total interconnection capacity. This would mean that the CAISO is proposing to limit the total capacity of projects accepted into the study process to 150% of the available TPD in each zone. However, the resource portfolios and associated busbar mapping adopted by the CPUC include a significant volume of Energy-Only resources to meet California’s clean energy and GHG emissions requirements (24 GW by 2035 in the busbar mapping for the 2023-24 TPP). Our understanding is that the EODS transmission capability estimates published by CAISO are not based on reliability studies; they are based on certain redispatch assumptions on top of the FCDS transmission capability estimates. The Straw Proposal does not provide a clear path for both deliverable and Energy-Only projects to interconnect up to the volumes represented in the CPUC resource portfolios.

Clearway proposes that the zonal data include two numbers for each zone: deliverable capacity and total interconnection capacity (which will be based only on reliability constraints). This would require changes to the CAISO’s current transmission capability estimates; Clearway recommends additional stakeholder input on how to implement these changes. The study process should also allow for projects to elect either to seek full or partial deliverability or proceed as Energy-Only, consistent with the CPUC’s resource portfolios.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU.

Clearway believes that providing more information upfront about interconnection costs and timelines, as discussed in our response to question 1, will be key to enabling LSEs to begin the procurement process earlier. Without reliable information about the cost and timeline for a project to interconnect and receive deliverability, it is not possible to make meaningful contractual commitments for a project.

b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements.

Before focusing on the details of the scoring criteria, Clearway requests that the CAISO take additional time to work through policy options raised by the CAISO and stakeholders. Many of the good ideas raised by stakeholders in earlier comments and workshops are not addressed in the Straw Proposal. Clearway has concerns about both the upfront scoring and auction concepts and believes there are other approaches to the process that would be easier to manage and lead to fair outcomes.

As discussed in question 1, Clearway believes that the best starting point for a revised interconnection process would be an upfront study, conducted by the CAISO based on the resource portfolios identified by the CPUC and other CAISO participants. This study would determine the available interconnection and deliverability in each zone, as well as the estimated cost and timeline for completion of required upgrades.

From that point, Clearway supports exploring a “first ready, first served” approach that avoids the need to score all projects at a single point in time:

• Following the release of the interconnection study, the interconnection request window opens.
• To secure an allocation within the available capacity in each zone, projects must meet a predetermined set of project maturity criteria. (These criteria could be specifically identified or could be defined using a scoring system like the CAISO has proposed – for example, reaching a predetermined number of points.)
• Capacity is awarded on a rolling basis over a 1-2 year period as projects meet the project maturity criteria.
• After the window closes, the CAISO conducts local studies to refine the cost and timeline estimates for the set of qualifying projects.  

This proposal would require more work to refine, but Clearway believes it could be a good alternative that relies on the “first ready, first served” principle and does not force projects into the permitting or contracting process before they have line of sight to interconnection.

c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO.

i. Please indicate interest in participating in a workgroup to refine scoring criteria.

While overall Clearway is concerned about applying these scoring criteria so early in the process, we can offer the following initial feedback on the specific scoring criteria in the Straw Proposal:

• Clearway supports awarding points to expansions and repowers of operating projects. These projects are able to make efficient use of land and interconnection capacity, with developers with proven ability to complete and operate projects.
• As discussed during the stakeholder meeting, the Straw Proposal does not appear to give equal treatment to the interests of CPUC-jurisdictional LSEs and other LSEs. If a scoring system is employed, it should apply equally to all power purchasers.
• We are concerned that the proposed scoring metrics for permitting would have unintended negative consequences in the permitting and community outreach process. Awarding points for submitting a permit application would place a significant burden on counties and other permitting authorities, who would likely receive an influx of applications from early-stage projects without line of sight to deliverability or even interconnection. Similarly, it is not clear what a meaningful indication of community support would be at such an early stage, and encouraging developers to socialize very early-stage projects that do not yet have line of sight to interconnection could have unintended negative consequences. Outreach by many developers ahead of a fixed allocation date could give communities the impression that many projects are about to be developed at the same time, when in reality not all projects will advance in the interconnection process and those that do will be developed over a period of many years.

Clearway also opposes the proposed developer cap, as it would be difficult to implement and could result in discriminatory treatment of companies with more complex parent structures. In particular, the CAISO would need to define how to treat joint ventures or partial ownership under the proposed cap and would need to examine the ownership structure of each project in the queue. Clearway Energy Group has two large parent companies, each of which owns exactly 50% of the company. Each of these parent companies also owns other energy businesses that may be active in the CAISO market. However, Clearway does not coordinate our project development and interconnection plans with those businesses. Requiring us to do so – and potentially to limit our own development activities in California based on other companies’ decisions – would create a significant hardship.

MISO considered implementing a per-developer cap in its recent queue reform but ultimately rejected this idea after stakeholders pointed out the difficulty of implementing such a cap given complicated corporate structures. For example, if a single parent company owns both a utility company and an independent power producer, requiring these entities to coordinate on queue entry plans may trigger violations of FERC rules of conduct or anti-trust regulations. (Comments available at https://www.misoenergy.org/stakeholder-engagement/stakeholder-feedback/2023/pac-generator-interconnection-queue-improvements-proposal-pac-2023-1-20230719/; for examples of comments discussing this issue, see comments filed by AES, NextEra, and Intertran Energy Consulting on behalf of Clean Grid Alliance.)

Clearway agrees with the perspective expressed by AES at the Sept. 28 stakeholder meeting that the fundamental causes of seller-side market power are restrictions on supply and on market entry. The CAISO can address this issue by loosening the proposed limit on projects entering the interconnection queue.

d. Please provide feedback on auction design and use of auction revenues.

Clearway, like nearly all stakeholders in this initiative, opposes the use of an auction to allocate interconnection or transmission capacity, as it would distort the allocation of capacity by rewarding the developers with the deepest pockets and lowest cost of capital. We are concerned that the auction concept is diverting energy and focus during the IPE process, while other timely issues have not yet been addressed.

The most problematic component of the auction proposal is the proposal that developers finalize their bids when submitting initial interconnection requests. If the CAISO moves forward with an auction as a tiebreaker in a particular zone, the auction should be initiated only at the point when it is needed. Developers should be able to develop bids knowing which project or projects are going into an auction. Otherwise, developers will have to allocate capital upfront to every project they are entering into the queue, in case all of them are subject to an auction. This will further distort the auction results and allocation of capacity. 

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

Clearway supports making Option B available both for projects outside identified transmission zones and for projects in excess of the identified deliverable capacity in a transmission zone. Having this flexibility will be important to support project development, especially for projects serving customers that are not California LSEs (e.g., large C&I customers).

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

a. TPD allocation

The context for TPD allocation will be very different in a future interconnection process where developers have access to information on available capacity, costs and timelines upfront and where projects must be at a more advanced state of maturity to enter the study process. As a threshold question, it would be helpful for the CAISO to clarify whether there would still be a separate TPD allocation process if the Straw Proposal were adopted as-is, or whether in the CAISO’s proposal, deliverability would effectively be allocated as part of a project’s acceptance into the study process.

Given the significant upgrade timelines associated with the deliverability upgrades affecting Cluster 14’s allocation process, Clearway supports addressing the TPD retention criteria for Cluster 14 projects as part of this set of changes to the TPD process; the CAISO team indicated during the stakeholder meeting that this is still in scope for the IPE initiative, which Clearway appreciates.

The CAISO should continue to allow Energy-Only projects with PPAs to compete in Group A. The reason provided for removing this option is that, to date, few Energy-Only projects have signed PPAs. However, if a project does have a PPA, it should be able to compete in the TPD allocation process.

b. Interim Deliverability

Clearway welcomes the CAISO’s commitment to work with stakeholders on a multi-year interim deliverability allocation to address the timing challenges facing projects with long lead times for deliverability. Given the importance of this issue to projects that are currently in development, we encourage the CAISO to address this topic within the IPE initiative timeline; we would like to participate in a working group on this issue if one is convened.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

Clearway’s comments are limited to a subset of topics within this question:

b. Are the updates to the Limited Operation Study sufficient?

Clearway encourages the CAISO to go farther than the 9-month timeline proposed in the Straw Proposal for developers to request an LOS. The LOS will continue to be an important tool as the CAISO and other decision-makers work to resolve the chronic delays that are holding back project development. The timing of an LOS request should be driven by upgrade delays instead of an arbitrary window prior to COD. To maximize the usefulness of the LOS, PTOs should be required to notify interconnection customers as soon as any Network Upgrade is delayed, and the customer should be able to request an LOS at that point, even if it is more than 9 months prior to synchronization.

Clearway appreciates the clarification that if an MMA request has been deemed complete, an LOS can be requested even if the MMA is still pending.

e. Comments on TPD Transferability proposal

Clearway opposes the proposed broad limits on transfers of TPD. The CAISO has not clearly demonstrated what problem TPD transfers are creating today. While the Straw Proposal suggests that there could be exceptions to the blanket limitation on TPD transfers, this does not provide sufficient certainty to developers, offtakers, and financing partners. A project that is transferring deliverability may still be viable at its original size – for example, it may be proceeding to a PPA as an Energy-Only project in an area where Energy-Only projects are included in the CPUC’s busbar mapping.

f. Comments on viability criteria and time-in-queue limit

Clearway supports the proposed limits on time in queue for older projects. Additionally, Clearway encourages the CAISO to facilitate sales of older projects that are lingering in the queue by publishing information on these projects’ current owners.

g. Comments on project Modification updates

Clearway encourages the CAISO to continue advancing a fast track for simple project modifications. We disagree with the statement in the Straw Proposal that “a tiered approach to the type or cost of modification requests does not provide process improvements.” While that may be true of the administrative process for handling requests, there is significant opportunity to save time and resources in the analytical process by streamlining simple modifications.

For example, MMAs addressing inverter changes are routinely accepted without issue so long as the overall MVA rating of the gross facilities is not materially increased due to the addition of pair resources. Similarly, modest changes to the overall design basis including collection system design, gen-tie routing and electrical configuration require MMA submittal and approval and are routinely approved. These modest changes could be memorialized through the already required as-built submittals.

j. Comments on timing on starting network upgrades

Clearway supports the proposal to add a new milestone requiring the PTO to notify the interconnection customer and the CAISO when work has begun on the network upgrade and interconnection facilities. This requirement should be strengthened by requiring the PTO to start work within 30 days of the interconnection customer issuing NTP. Delays in network upgrades have become a persistent problem affecting projects across the CAISO system, and this requirement would help keep projects on track.  

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

First and foremost EDF-R requests that the CAISO provide data on how many cluster 15 interconnection requests provided actual site control (rather than the deposit.) EDF-R believes that most projects in queue do not have site control and suggests that with the change to requiring 90% of site control to enter the queue some of the more complex proposals in IPE 2023 Track 2 may be moot or add more complexity than net benefit.

In general, EDF-R understands the need for the CAISO to adopt a zonal approach to interconnection requests, and asks the CAISO to consider the following suggestions as they move forward with the proposal:

• The CAISO must provide sufficient detail about the zones well in advance of the April interconnection request (IR) window for a zonal approach to work. On the September 28^th call the CAISO expressed concern about the ability to create and distribute a resource that clearly defines boundaries of the zones and nested or cross-zone constraints. CAISO’s proposal is a bright line threshold policy (projects are “in” or “out”, and projects that are “in” receive priority treatment.) Stakeholders need to know where those lines are in offer to make informed choices when submitting IRs.
  
  EDF-R requests that this data should be consolidated to one central location to make information consistent and easily accessible before the next cluster window.
   
• Interconnection report example - EDF-R requests CAISO provide in the next proposal iteration an complete inventory of what information they will provide in an “state of the grid” report.
   
• IR zone validation EDF-R also recommends that, as a control mechanism, CAISO add confirmation of zone in the IR validation process. This way, as constraints or zones shift with the addition of a new cluster, CAISO and stakeholders are sure that projects are in the correct process (Option A with TPD allocation vs Option B.)
   
• Timeline considerations - CAISO may also need to consider moving the Interconnection Request window to later in the year (perhaps June) after Transmission Planning Process reports are typically approved so that the in-zone-out-zone analysis can be done based on the best data possible.
   
• Point of interconnection changes - interconnection customers need the ability to change POI. Currently the tariff allows changes to the POI within the same study area as the POI submitted in the original IR. To the extent interconnection zones cross study areas, CAISO should also allow for changes within the zone as well, even if the change happens to change the study area.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU.

Pricing information

EDF-R echoes and endorses stakeholder comments made on the call that stakeholders need some amount of dollar per MW pricing information within the annual “state of grid” report CAISO will provide to share grid information interconnection customers need to evaluate potential IR sites. Cost per MW information is currently included in the Phase I report, and is used to obtain financing and to market projects to LSEs. Without this basic information interconnection customers and LSEs cannot responsibly proceed into any meaningful contract negotiation. It is understood that this information would have to be preliminary, given how much can change with the addition of a new cluster.

LSE interest

EDF-R supports the idea that LSE interest should be a component of the scoring system, but strongly opposes the CAISO implementing a system where projects receive high priority treatment in the IR phase for executed PPAs. This element of the proposal represents a perverse incentive, encouraging interconnection customers to seek meaningless contracts with no financial commitments or penalties for termination. Any PPA executed before a Phase I study, or its equivalent, is likely to be a phantom contract.

EDF-R does believe LSE interest can be a factor for considering commercial viability. Interest is a more nebulous term, and LSE interest should not be a ticket to the top of the viability pile. On the call the CAISO expressed concern that “LSE interest” is ambiguous and has the potential to be abused. EDF-R acknowledges that process abuse is possible, as it is in any process, but does not believe this is a credible risk. The CAISO, LSEs, and CPUC are all accountable to one and other in various ways and its well understood between the parties that accuracy in reporting is a top priority, so EDF-R does not believe that LSEs would provide letters of interest to projects if they are not interested.

EDF-R suggests that CAISO could provide some template language to be included in the letter as guidance to stakeholders and LSEs about the level of review and interest needed for the scoring system. Something like,

“[LSE] provides this assessment for the project for [Cluster #] consideration. [LSE] affirms that they have received a proposal from [interconnection customer] for [project]. [LSE] affirms that they have reviewed the proposal and believes [project] is well suited for inclusion in [LSE]’s portfolio because [reasons]. [Interconnection customer] has provided a development timeline that indicates a proposed commercial operation date of [date] for [MW] which is consistent with [LSE]’s needs, and this plan appears to include sufficient time for CAISO’s study process, contract execution, and construction of network upgrades. ”

Site control requirements

EDF-R requests CAISO Clarify site control requirements prior to submitting the FERC Order 2023 compliance filing. FERC allows each region to establish their own acreage requirements by technology type. These should be vetted with stakeholders and established as soon as possible if they will be applicable to Cluster 15.

b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements.

EDF-R supports and will attend workgroups to continue to develop the commercial viability approach.

EDF-R also supports the notion that rather than the current scoring process, the CAISO could adopt a gating process that scales requirements as projects proceed further into the study process, similar to SDG&E’s proposal. This approach would be simpler and similarly effective to the scoring process, and address some of the problems scoring criteria creates. Specifically, when CAISO becomes the organization that requires the most mature project to initiate an interconnection request, then bottlenecks will begin to appear in other entities, such as dozens of projects seeking to initiate permitting reviews at a small county or city office that cannot handle such a deluge.

EDF-R does not support the CAISO adopting an auction process, EDF-R does not believe an auction process will be needed, and that an auction process would have the overall impact of increasing contracting and RA costs, as bid costs will ultimately be baked into RA offers. An auction process runs oppositional to CAISO’s goals in its recently launched RA initiative.

c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO.

 i. Please indicate interest in participating in a workgroup to refine scoring criteria.

EDF-R will participate in any stakeholder workgroup on this topic, and believes such a work group is absolutely necessary given the importance of the issue. EDF-R requests CAISO schedule these workgroups right away, given time limitations driven by winter holidays.

d. Please provide feedback on auction design and use of auction revenues.

 EDF-R does not support the CAISO adopting an auction process, EDF-R does not believe an auction process will be needed, and that an auction process would have the overall impact of increasing contracting and RA costs, as bid costs will ultimately be baked into RA offers. An auction process runs oppositional to CAISO’s goals in its recently launched RA initiative.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

 In the straw proposal the CAISO proposed:

“The ISO proposes that projects filing interconnection requests outside of priority transmission zones will be placed into Option B, meaning these projects must finance all assigned network upgrades without cash reimbursement.” (page 27)

However, on the call and in the presentation (slide 28) the CAISO indicated that the projects will indeed be eligible for cost reimbursement for LDNU upgrades consistent with current CAISO policies, and that projects must post security for ADNU upgrades.

EDF-R strongly supports that projects who interconnect through option B be eligible for reimbursement consistent with option A projects. Furthermore, the CAISO should perform TPP process in such a way that if, absent the Option B projects, the TPP concludes the ADNUs would have been triggered by the TPP process, the projects are then released from their obligation to fund the ADNUs and reimbursed for any funds liquidated or spent.

EDF-R requests CAISO explicitly outline that option B projects will be eligible for that reimbursement in the next proposal iteration. EDF-R also requests CAISO make explicit in the next proposal iteration that Option B projects do not have to compete for TPD, and are fully deliverable by virtue of the Option B process.

EDF-R requests CAISO open option B to projects in any transmission zone. CAISO should be open to self-funded projects in areas wehre there is commercial interest. 

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

Interim Deliverability

EDF-R supports the proposed improvements to the interim deliverability allocation to ensure that existing deliverability is utilized as much as possible. A multi-year interim deliverability allocation process is desperately needed in order for projects to be able to execute contracts needed for mid-term reliability, which is currently significantly at risk.

EDF-R notes that interconnection customers need the ability to get NQC and interim deliverability information from the CAISO earlier than 9 months prior to sync to confidently execute contracts, especially for short term and mid-term needs. EDF-R requests CAISO be willing to provide NQC information as needed when requested via email.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects?

EDF-R believes the CAISO should offer a one-time opportunity for any project to withdraw from the interconnection queue without penalty, and ultimately will support the proposal.

However, EDF-R encourages the CAISO to reconsider the proposal and withhold less security than currently proposed. EDF-R believes the current proposal is overly conservative, and a proposal that more precisely weighs PTO financial risk will encourage more projects to withdraw, which the CAISO queue urgently needs. In the past three years 237 projects have withdrawn, representing 64 GW, and CAISO has only needed to withhold $2 million (12%) of the total collected funds to cover still needed network upgrades. In this timeframe $16 million was distributed to the TRR.

EDF-R believes it is reasonable for CAISO and the PTOs to develop a formula for withholding needed funds that more accurately reflects the real risk of underfunding still needed network upgrades. The current proposal to hold 50% of financial security for an unspecified amount of time and return unused funds eventually when network upgrades are constructed or finally decided as “not needed” creates ambiguity and could prevent return of funds by 10 or more years. EDF-R believes this proposal is too conservative and suggests a revised proposal, withholding less funds than currently proposed, but still an amount of funds that is likely to cover any network upgrades, will further incentivize projects to withdraw from the queue.

b. Are the updates to the Limited Operation Study sufficient?

EDF-R supports and appreciates the CAISO’s proposal to increase time to submit a LOS request to 9 months before synchronization. EDF-R notes that along with early interconnection, interconnection customers need the ability to get NQC and interim deliverability information from the CAISO earlier than 9 months prior to sync to confidently execute contracts, especially for short term and mid-term needs. EDF-R requests CAISO be willing to provide NQC information as needed when requested via email.

c. Comments on adding asynchronous generating facility requirements in the SGIA

EDF-R supports consistent requirements for all asynchronous generating facilities.

d. Comments on removal of suspension rights

EDF-R does not support the CAISO’s proposal to remove suspension rights from the LGIA.

e. Comments on TPD Transferability proposal

EDF-R strongly opposes the CAISO’s proposal to require assignor projects in the TPD transfer process to withdraw from the queue after they have transferred their deliverability to the assignee.

The CAISO’s premise for this proposal is, simply put, that energy only projects are non-viable and should be required to withdraw. Firstly, EDF-R disagrees on the point that energy only projects are always non-viable. Energy only projects are more marketable now than they have been historically, and given the supply environment there is reason to believe their viability could increase. For example, in October of 2023 Silicon Valley Clean Energy (SVCE) executed a contract with the Grace Orchard Solar project. Grace Orchard is slated to come online in the summer of 2027 and will provide SVCE 120 MW of renewable solar energy, accounting for 8-9% of SVCE’s 2028 annual retail sales. As LSE’s push to meet SB 100 goals of serving all retail electricity from renewable resources and zero-carbon resources by 2045, more energy only projects are likely to be needed.

Secondly the CAISO’s reasoning that energy only projects are non-viable and should be required to withdraw is contradictory to the CAISO’s TPD policies and itself:

1. CAISO’s TPD rules allow for energy only projects to seek FCDS after declaring commercial operation. It is easy to imagine a scenario where a allowing Project A to transfer deliverability to Project B would create a situation where both projects leave the exchange more viable: Project A can meet its contractual obligations and Project B is eligible to declare commercial operation and seek TPD again, or market as energy only. Or an alternate scenario where a project that is at the same POI shifts to energy only because the MW are now intended to charge a storage project. That is a viable pathway and the interconnection customers should be free to make best use of the project’s deliverability status.
   
   CAISO has ~23,426 energy only MW net to POI in the interconnection queue, and 18,269 MW are in Clusters 10, 11, 12, and 13. Given the CAISO’s root concern is encouraging projects to proceed to commercial operation, any proposed process to affect energy only projects should equitably apply to all energy only projects.
   

2. CAISO’s proposal penalizes projects for using the deliverability transfer process to arrange for and build marketable projects. CAISO’s mission, administering effective cluster study and queue management procedures, is to provide avenues for projects to declare commercial operation and meet California’s supply needs. CAISO knows how popular the ability to transfer TPD is with interconnection customers and should not add disincentives to make use of the process.

EDF-R does not disagree that energy only projects can and do “clog up” the interconnection queue. EDF-R believes the CAISO should resolve this issue with queue management proposals, not a policy that specifically targets projects assigning their deliverability to another project.

f. Comments on viability criteria and time-in-queue limit

EDF-R supports this proposal.

g. Comments on project Modification updates

EDF-R disagrees with the CAISO’s proposal to increase the modification deposit for all modifications. From the CAISO’s description on the call, it appears that part of the reason CAISO is making deposits for all modifications is because having a consistent modification amount will streamline administrative functions with CAISO’s financial accounting system. The CAISO’s own data does not justify this cost increase. In the last three years CAISO has performed 249 modifications and only 25% have gone above $10,000. Furthermore it’s clear that simpler changes, like COD changes, cost closer to $3,000 to perform.

EDF-R can support CAISO either:

1. raising the deposit for complex changes, but keeping the $10,000 deposit for simpler changes, or

2. raising the deposit to $15,000 so that costs are covered 80% of the time (or more)

3. Increasing the number of changes that can be approved without an, such as forgoing inverter changes until inverter procurement has been performed.

EDF-R acknowledges that the CAISO’s standard MMAs regularly go beyond 45 days, so moving the days to complete in the tariff to 60 days is an acknowledgement of reality. EDF-R appreciates the CAISO’s commitment to host modification calls between the ISO and PTO engineering teams and the interconnection customer following the second or third validation turn, coordinate with the PTOs to improve validation reviews, and identify specific milestones such as executing the GIA or providing notice to proceed in the modification results.

EDF-R also suggests that collectively we may be approaching the MMA communication inefficiently. EDF-R suggests that the CAISO include the interconnection customer on all communications with the PTO about MMA requests. None of the information in the email chains about the MMA could be considered confidential, and this would help interconnection customers to know the status of the MMA, as well as assist with technical issues sooner.

At a minimum EDF-R requests CAISO improve the IR and MMA process updates to be consistent with NRI process updates. the CAISO’s NRI process provides automated email updates to the IC and interested parties as to where in the process the PTO and CAISO are: CAISO eval, PTO eval, comments among themselves, comments to IC, draft final MMA letter, MMA letter final, etc.

h. Comments on postings for shared network upgrades

ED-R appreciates CAISO’s support on the proposal on shared network upgrades. If one interconnection customer is ready to proceed with construction of a shared network upgrade then all participants in that upgrade must post the needed security for and fully fund that upgrade as applicable. The CAISO specified that this should occur regardless of their deliverability status or whether they have executed a GIA. EDF-R requests CAISO provide details on how those funds will be handled in the event that a project with an unexecuted interconnection agreements withdraws from the interconnection queue. EDF-R opposes the notion that this new procedure should increase financial risks for projects with unexecuted interconnection agreements.

i. Comments on timing of incorporating MMAs into the GIA

EDF-R supports the CAISO’s proposal to wait until close to the time the project is set to synchronize to the grid before amending a project’s GIA to incorporate MMA results. Along with this change CAISO must include in the MMA report both the results of the MMA and the effects on financial milestones. For example, a COD extension should come with payment schedule update. Otherwise the interconnection customer may be held in breach of not meeting financial milestones for financial milestones that should not logically be due, if the delay of associated network upgrades doesn’t impact other interconnection customers. Given the CAISO is proposing to increase the MMA deposit and the authority of the MMA report, EDF-R believes this additional requirement is necessary, logical, and reasonable.

j. Comments on timing on starting network upgrades

EDF-R appreciates CAISO’s support on the proposal to require PTOs to move forward with network upgrades once the NTP is provided by the interconnection customer and supports the CAISO’s proposal a new milestone be added requiring the PTO to notify the interconnection customer and ISO when activity has begun on the network upgrade and interconnection facilities. EDF-R takes this opportunity to note that it is highly likely that moving forward with upgrades on this proposed cadence will serve interconnection customers, the CAISO, and PTO by encouraging earlier transmission availability.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

EDP Renewables (EDPR) appreciates the opportunity to provide feedback to the California Independent System Operator (CAISO) on the Interconnection Process Enhancements (IPE) Track Two Straw Proposal (Proposal).

Successful implementation of the zonal approach to interconnection hinges on the CAISO’s ability to provide transparent, timely, and detailed data to prospective interconnection customers. EDPR requests that the CAISO publish a single resource that includes all the inputs relied upon to reach the available transmission capacity and boundaries for each zone at the most granular level of detail practicable.

The MOU between CAISO and other California entities is good for the industry to plan more cohesively but introduces several complex feedback loops between separate processes. Compiling the information into one document will reduce confusion and additional informational requests that would result if developers must compile information from different policy documents, completed by different agencies, and released at different times of the year to get a sense of available interconnection capacity in a given zone. The document should also include citations and links to each of the separate documents where inputs have been pulled from. This resource must also be published in a timeframe that gives developers sufficient time to make business decisions based on the information provided.  

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU.

It is inappropriate to incorporate LSE and offtaker interests into the interconnection process. At this time of the project development cycle project costs and commercial operation timelines are unknown. Without those two key elements of an offtaker agreement, any agreements that are created to meet this purpose will either be inaccurate at best or manipulative to game the system at worst. LSE interests and needs for resources are appropriately incorporated through the resource planning process. If there is a project that is so needed in an area without capacity that it should be given priority status, then that LSE should proceed with that project as an Option B project. Additionally, LSEs are already given priority for their projects in Appendix DD section 8.9.2 during the TPD allocation process.

b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements.

EDPR believes that the CAISO should spend additional time to develop more robust scoring criteria that can further minimize the usage of the auction concept. As currently constructed, it is highly likely that multiple viable projects will have equal scores and therefore require the auction to tie-break and decide which project is included to be studied. With a more robust scoring system, the tie-breaker auction becomes something that is rare – not the norm. Limiting the usage of the auction concept can also address stakeholder concerns that the auction will cause escalating costs.

In the straw proposal, the CAISO proposes that the bids should be submitted at the time of application. However, EDPR believes that bids should only be submitted to CAISO for specific projects when an auction is required. This will allow for interconnection customers to evaluate on a project specific basis how much they are willing to bid into an auction and make the most informed decision only when warranted rather than to think about how much they are willing to bid on all projects submitted in each cluster window. 

c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO.

1. Please indicate interest in participating in a workgroup to refine scoring criteria.

EDPR is happy to participate in a workgroup to refine scoring criteria. 

d. Please provide feedback on auction design and use of auction revenues.

 Please see comments above in 2b.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

No comment at this time. 

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

EDPR appreciates the proposal to create a new deliverability product as it provides developers with additional flexibility. However, we are worried that it does not address the underlying issues that cause long timelines for projects to get deliverabiltiy allocation.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

d. Comments on removal of suspension rights

EDPR questions whether the CAISO can remove suspension rights given FERC precedent in Order 2003, which was recently upheld in FERC’s Sept 29^th order denying Arizona Public Service from implementing a needs-based test for suspending projects.

e. Comments on TPD Transferability proposal

EDPR understands why CAISO is seeking to limit TPD transferability to prevent a newer project to be able to take advantage of protection that might exist for earlier queued projects. We encourage CAISO to consider whether they can achieve this goal with a more focused proposal rather than a blanket ban on TPD transferability.

f. Comments on viability criteria and time-in-queue limit

EDPR is concerned that projects who are moving forward responsibly may end up getting removed from the queue because of actions outside their control. Any time-in-queue limits should have exceptions for when things outside of project developer’s control cause them to cross the limit. EDPR supports similar hard time limits for other activities that happen during the interconnection process that are completed by other stakeholders and significantly contribute to a projects time in the queue.

h. Comments on postings for shared network upgrades

EDPR supports both the concept to accelerate starting network upgrades when the first project posts security and to require all projects related to that upgrade to post financial security. We ask that CAISO allow a project that is required to post financial security for a network upgrade triggered by another project to have a reasonable amount of time to post that financial security.

j. Comments on timing on starting network upgrades

Please see comments above in h.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

ENGIE North America, Inc. (“ENGIE) appreciates the opportunity to submit these comments in response to CAISO’s Straw Proposal for interconnection Process Enhancements. ENGIE is a subsidiary of ENGIE SA, a global energy company and a leader in low-carbon energy systems with a mission to accelerate the transition towards a carbon-neutral world. Globally, ENGIE owns and operates over 100 GW of power generation and is a leading energy supplier to commercial and industrial customers. In the United States, ENGIE owns and operate over four GWs of renewable generation and battery energy storage.

Considering CAISO’s proposal to limit the volume of interconnection requests by each defined transmission zone, it will be critical for interconnection customers to have data well in advance of the interconnection queue window opening in order to make informed decisions. ENGIE supports AES’s recommendation to develop and provide an annual report that is published at least six months prior to the cluster window opening. CAISO’s zones will not be static and development of them not a black and white exercise. In addition to providing information in advance of the queue window, the CAISO should conduct an annual process as part of the transmission planning process to allow for transparency and stakeholder input into the development of the transmission zones.  

The primary criteria for the zones CAISO has proposed is systemwide deliverability or “FCDS Capability.”  This is important information to provide the market and to possibly use for study prioritization but this definition of deliverability does not completely constrain the ability of a project to interconnect.  For example, energy only projects can interconnect safely and reliably without hitting up against deliverability constraints, which are based  on being able to broadly serve all load under peak conditions.  Also, CAISO should be open to resources that can provide capacity to a local area.  Such resources may not be “deliverable” using CAISO’s definitions but may provide valuable capacity and energy  that should be allowed to move through the interconnection process. In the case of energy storage for example,  it doesn’t make sense to be predicated to just where there is transmission capacity considering the swiss army nature of a battery and what it can do to benefit the grid.

As the CAISO is aware, there are dependencies among FCDS Capability between certain zones.  For example, the amount of FCDS Capability identified for the  “New Mexico Wind” Zone shown in Figure the Straw Proposal will to some degree limit the amount of FCDS Capability that is available  in SCE Eastern. The former is partially “nested” within the latter.  CAISO should make these dependencies explicit when it is developing and publishing the zonal information.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

Scoring Criteria

ENGIE supports applying scoring criteria to rank-order interconnection requests for study and supports forming a sub-group to further define criteria. ENGIE would like to participate in the subgroup. Given the importance of the scoring criteria in determining what projects move forward to the study process, it is crucial that the metrics reflect commercial and developmental realities and are clear and measurable. The scoring criteria should be reviewed annually to ensure it continues to align with commercial and system needs. Scoring criteria must be equitable and not favor utility self-build projects as compared to IPP build projects. It is unclear why the CAISO proposes to treat non-CPUC jurisdictional LSEs differently than other LSEs and would appreciate more context in the next version of the proposal.

ENGIE does not support including commercial readiness as a scoring criterion. The CAISO acknowledged at the September 28 stakeholder meeting that having an executed PPA at the pre-study stage of the interconnection process does not represent commercial reality and ENGIE agrees. The CAISO is proposing to allocate a large number of points to this category and this could incent bad behavior leading to interconnection customers signing PPAs that will later be revoked in order to advance through the queue process. Incorporating commercial readiness as a scoring criterion could also favor utility self-build projects. Although Engie is skeptical that an auction can be adopted at this time, if and when it is adopted, bids by prospective developers will be highly redundant with any metrics related to “commercial readiness”  The developers bid will be the expression of viability.

25% Developer Cap

ENGIE NA strongly opposes CAISO’s proposal to impose a limit on developers to 25% of available transmission capacity across the ISO footprint. CAISO’s is already in effect capping the overall queue size by proposing to limit what is studied in each zone to 150% of transmission capacity. This should be sufficient towards reducing the volume of projects and an additional developer queue cap is unnecessary. Applying a MW cap to each developer will not ensure the most commercially viable projects move through the interconnection process but rather will artificially limit what developers can do.  In addition, a per company cap is unduly discriminatory and will limit competition. It is inappropriate for the CAISO to pre-determine how market share is allocated as it pertains to entering the interconnection queue. The interconnection queue is not a market and attempting to limit “market power” is not applicable in this context.

CAISO has proposed a developer limit before.  Each time, CAISO has never provided evidence that multiple requests submitted by a single party were, on average, of a lesser quality or “less serious” than single, double, or triple requests submitted by a single entity. Furthermore, CAISO did not provide any evidence that the cost of processing multiple requests was any higher. Even with certain developers submitting multiple requests, CAISO has never been able to show that these “larger” participants limited developer diversity or competition in any way. FERC, including in its  recent Order 2023 has never placed limits on any individual developer.  CAISO should not spend time and resources on proposals that will not be deemed just and reasonable by FERC.

Auction to Enter Study Process

ENGIE recommends that CAISO defer development of an auction to a later phase of interconnection reform and instead rely on scoring criteria and other enhancements to increase the viability of interconnection applications at this stage. Any projects that achieve the highest scores should proceed to the study process even if that exceeds somewhat, CAISO’s goal to limit what is studied in each zone to 150%. An auction mechanism will be very complex for a small number of projects as proposed by the CAISO.   CAISO’s proposal is overdetermined: it would  use bids to clear demand only in a group of projects with the same or similar score. Yet, the scoring will always be subjective to a degree and adding the bidding layer will greatly add complexity and will  likely lead to disputes.  CAISO should instead, at least until an auction can be carefully developed, refine its scoring and take “tying” projects even if they go above the announced (e.g. 150%) threshold.  Erring on the side of inclusion also has the benefit of allowing for more competition in the bidding process.  The CAISO should not allow projects with a zero criteria score to enter into an auction. The CAISO may want to consider setting a minimum scoring criteria to enter the auction.

ENGIE recommends that the CAISO request bids to be submitted only if projects are selected to complete in the auction when developers have more information on what projects are moving forward or not. ENGIE recognizes that this will add additional time and effort on the CAISO’s part but will result in more accurate bids being submitted into the auction.  

Applying FERC Order 2023 requirements to Cluster 15 projects

Cluster 15 projects were submitted under current rules and decisions were made in that frame. If the CAISO is to apply retroactively FERC Order 2023 requirements to Cluster 15 projects, developers must be given a runway to meet requirements and be offered the option to submit a deposit in lieu of meeting site control requirements. ENGIE would propose this deposit in lieu apply to Cluster 15 projects only considering the unique circumstances of these projects entering the queue under a different set of rules. It is unclear how other elements of the proposal, such as the scoring criteria, would be applied to Cluster 15 or not. ENGIE would appreciate more clarity from the CAISO on what will or will not apply to Cluster 15 projects.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

CAISO’s Straw Proposal, p. 27, states “projects filing interconnection requests outside of priority transmission zones will be placed into Option B, meaning these projects must finance all assigned network upgrades without cash reimbursement.”   CAISO’s “Option B” path for seeking Full Capacity status has been problematic since its adoption nearly a decade  ago.  Option B  was structured around how a project that does not receive a TPD allocation to nonetheless  attain Full Capacity via self-funding.  Given the type of area network upgrades typically identified for Option B this led to “fatal” levels of anticipated cost responsibility and as a result there  have been almost no Option B projects that have funded identified upgrades and attained COD.

Also, CAISO gives no specificity to what it means by “outside of priority transmission zones”  As noted above, the zones are not strictly “geographic” as they are interrelated.  Should a new form of Option B be created that provides a path for Energy Only projects or projects that seek only local capacity upgrades.  This is not Option B in its current form but a New Option B that may be a way for CAISO to maintain a nondiscriminatory process (and foster competition and innovation of project types) while simultaneously allowing CAISO to prioritize IRs that meet the resource planning  criteria of California’s and CPUC policy makers.   Engie supports further discussion on this topic .

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

ENGIE supports continued discussion on enhancements to and relaxation of TPD criteria for projects entering the 2024 TPD allocation process and supports these detailed discussions taking place through a separate working group. 

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

ENGIE supports the one-time withdrawal opportunity as proposed by CAISO.

ENGIE does not support removal of suspension rights from the LGIA but could support further discussion on refining rules around suspension if necessary. As noted by the CAISO, suspension rights are seldom utilized so it seems there is little benefit in elimination. Suspension allows some flexibility for developers to accommodate delays and should be retained.

ENGIE is open to the adoption of  reasonable post study milestone requirements, such as a date required  for the execution of GIA or issuance of NTP/Third Posting. However, CAISO must make clear that any milestones imposed on generators  must also be adjusted for PTO delays and reflect the ability of the generator to exercise its suspension rights (see comments above).   In fact, the scope of this particular proposal should be expanded to consider ways to streamline the updating of milestones due to PTO delays.  Generators are nominally protected by PTO delays in the current Tariff and BPM but the process is cumbersome, requiring the generator to chase down “delay letters” out of the PTO.  If the CAISO or PTO announce a delay (such as in a report issued in the TPP or in a  quarterly Transmission Development Forum), that should be sufficient evidence to allow the generator to  update its project milestones commensurate with the now-known delay.  

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

esVolta appreciates the opportunity to provide comments on the 2023 Interconnection Process Enhancements Track 2 Straw Proposal.  esVolta develops, owns and operates utility-scale battery energy storage projects across North America. esVolta's portfolio of operational plus utility-contracted backlog projects totals nearly 1.5 GWh, and we are developing a pipeline approaching 20 GWh of further large project opportunities, averaging about 500 MWh each. esVolta has both operational battery storage projects in the ISO as well as requests in the ISO’s interconnection queue. Lack of comment on any particular issue should not be construed as endorsement.

esVolta supports the ISO providing additional information as early as possible so interconnection customers can fully consider that information prior to submitting an interconnect request into a transmission zone. However, esVolta notes that this information is only as good as its inputs, thus updating the inputs often and at crucial stages before the request submittal window will determine the value of this information to interconnection customers.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

On the ISO’s proposed site control requirements, esVolta supports the proposal to align with FERC Order 2023’s requirement for 90% site control for the generating facility at time of request submittal. In addition, CAISO should include an exception in its FERC Order 2023 required BPM for technology-specific acreage requirements for site designs stamped by a professional engineer. CAISO does not currently have hard acreage requirements in its BPMs for site control, and instead defers to interconnection customers to attest that they sufficiently control the “acreage reasonably necessary” to site the resource. Even in those jurisdictions that do have hard acreage requirements, the transmission provider allows interconnection customers to propose alternative site sizes if warranted through professional review. See Southwest Power Pool OATT, Att. V, Section 8.2(a)(1); PJM Manual 14G, Section 2.4. To this end, esVolta supports the request of Middle River Power to incorporate an exception to hard acreage requirements for professionally stamped designs. See Comments of Middle River Power, LLC at 2 (8/15/23).

esVolta opposes CAISO’s proposal to award additional viability criteria points for co-locating with existing resources. The site control requirements already reflect the project viability gained by having control over the land required to site incremental generating resources. Therefore, the points awarded to co-located resources provide no additional assurance of viability, and can only be awarded to incumbent resource owners. Favoring co-located generators may also have implications for open access beyond those allowed by FERC through the viability demonstrations required by Order 2023, since co-located resources would by definition have to be developed by or in agreement with incumbent resources whereas no such preferences for incumbents were approved by FERC in Order 2023. By giving significantly more points to co-located resources in the viability criteria, CAISO is effectively reducing the number of projects that can compete for valuable ATC, thereby concentrating pricing power in a handful of existing resources to the detriment of retail prices and reliability. Co-located projects must still be permitted and receive offtake. As such, they are no more viable than greenfield projects that compete under the same scoring criteria. Nevertheless, if CAISO insists on awarding additional viability points to co-located resources, those points should only be awarded if the resource meets the MOU goals, i.e. has the operational characteristics and is located in the geographic locations consistent with state agency resource planning. Moreover, these resources should only be awarded additional viability points for co-location if they are located in zones with sufficient available ATC to accommodate the incremental interconnection capacity, or where upgrades planned by CAISO would make sufficient incremental ATC available before the resource’s COD.

esVolta is interested in participating in a workgroup to refine scoring criteria.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

CAISO should modify its proposal to allow Interconnection Customers to switch from Option B to Option A at the time of receipt of the Cluster Study Report. Under the single-phase study process, completion of the Cluster Study Report will take a significant amount of time, during which changes could be appropriately made to the inputs underlying the available ATC by zone and substantively change an interconnecting customer’s decision choosing between Option A and Option B. If the ISO seeks to limit the ability to switch, the ability to switch to Option A could be made available only to requests that are located in zones where incremental ATC has been made available due to interim changes in underlying inputs since the submission of the request. By strictly limiting interconnection customers who proceed down the Option B route with no option to switch, CAISO may over incentivize new requests exclusively in the transmission zones showing the most current ATC availability, to the detriment of projects that might provide value in addressing future needs. On this issue esVolta supports the comments submitted by New Leaf Energy and the Large-Scale Solar Association. See Comments of New Leaf Energy, Inc. at 1(III) (8/15/23); Comments of Large-Scale Solar Association at 1 (8/15/23)

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

No comment at this time

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

esVolta supports the ISO’s proposal to eliminate suspension rights. The CAISO is unique compared to other transmission providers insofar as its proposed maximum time-in-queue requirements, the existing ability to modify a project’s COD through the MMA process, and its requirement to fund shared network upgrades during suspension. These characteristics make suspension unnecessary or unwarranted in most instances unique to CAISO, and valuable ATC is tied up and withheld from projects seeking to move forward by projects that may not be viable.

In addition, esVolta requests that the ISO revise its BPM to reduce the amount of time mothballed resources retain deliverability from three years to one year. See BPM for Generator Management at 85. Currently, there are nearly 100 MW of deliverability held by mothballed resources that inject zero MW to the grid that could be utilized by other projects in the queue. This includes in Local Areas that have several gigawatts worth of Local Capacity needs now and in the future. See Announced Retirement and Mothball List; 2024&28 Final LCR Study Results Summary of Findings at 5 (4/12/23). As additional projects seek mothball status from the ISO, this stranded deliverability capacity will only grow and harm reliability and affordability at the expense of retail customers. Instead, that deliverability capacity should be made available to the viable resources that progress through the interconnection queue. Similar to other ISO proposals that giver interconnection customers up to a year to demonstrate viability to ensure that projects do not “linger in the queue,” the ISO should also limit the time period that existing but mothballed resources “linger” with deliverability rights. See California ISO 2023 Interconnection Process Enhancements, Track 2 Straw Proposal at 54 (9/21/23).

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

No comment

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

Golden State Clean Energy (“GSCE”) opposes the proposal to limit interconnection request capacity per transmission zone to 150% of the available and planned capacity within each zone. The proposed cap will inappropriately restrict the competitive procurement process by overly limiting the number of projects that LSEs can negotiate with, thus potentially leading to significant increases in PPA prices, as well as increasing the likelihood of California not meeting clean energy and LSEs’ procurement requirements if proposed projects ultimately withdraw from the queue. Stakeholders suggested setting the limit between 150-300%.[1]  GSCE recommends CAISO adopt a cap of at least 200% to appropriately balance the need to limit study requests with the imperative to maintain an open and competitive procurement landscape.

GSCE also opposes the proposed 25% cap on individual developers. This proposal was not well documented in the working group process, and any limit set would likely be arbitrary and potentially discriminatory. The goal should be to seek the most viable projects, and placing any limits on viable developers with competitive projects will result in market inefficiencies and would be anti-competitive. CAISO should strive for the best projects to be in the queue – not an arbitrary cap on individual developers.

Finally, GSCE supports CAISO automatically studying any project that a non-CPUC jurisdictional LSE demonstrates is a preferred resource in its resource plan that has been approved by its Local Regulatory Authority. However, it is important that the CAISO not count such resources against the cap on interconnection capacity per transmission zone because that number is predominantly informed by CPUC planning processes and must include a buffer for competition and project failure. Counting non-CPUC jurisdictional LSE preferred projects against the zone’s cap only cuts into the already very slim margin provided to allow for competition and account for project failure.

A. How to incorporate LSE interests and commercial procurement activities earlier

No comment.

B. Relationship and potential trade-offs between the scoring criteria and auction element

In general, GSCE does not support the use of an auction mechanism but recognizes it is currently only being proposed for use as a tie breaker to the readiness scoring process. GSCE would oppose use of an auction mechanism as the only means of limiting future interconnection requests in the event CAISO has a difficulty obtaining consensus on the scoring criteria.

C. Feedback on and recommendations for scoring criteria; interest in workgroup

GSCE would like to participate in a working group on scoring criteria and believes important stakeholder discussions like this should be open to all, but GSCE appreciates having focused meetings within this initiative to address specific issues like the scoring criteria.

Permitting

GSCE strongly supports including permitting in the readiness scoring process. Permitting is a necessary step for all projects, and permitting challenges can derail a project later in the development process. Although CAISO does not have an express role in permitting processes, it has assessed this type of commercial readiness for years in the deliverability allocation process and thus has proven capable of verifying major permitting milestones and using them as just and reasonable development benchmarks.

Commercial readiness and offtaker interest

The proposed point system allows a project to receive 20 points for a letter of interest from an LSE in addition to points for either being shortlisted, included in an LSE resource plan, or having an executed PPA. It is unclear why an LSE would not write a letter of interest for a project that meets one of the other “commercial readiness” categories. As a result, the letter of interest could provide a significant boost in the interconnection process despite the fact that it does not require any significant additional interest commitment from an LSE. CAISO should clarify how “interest from an offtaker” and “commercial readiness” are not double counting similar readiness attributes.

Interconnection requests that provide an executed PPA should be given fewer points than what is being proposed so this does not create a perverse incentive to sign contracts that are unenforceable or otherwise subject to change. This is especially important given that interconnection customers will have much more leverage in negotiations in the future because there will be much less capacity in the queue relative to LSEs’ procurement needs. Future interconnection customers could execute PPAs that are drastically under market and, after being accepted into the queue due to the PPA status, later raise the contract price. This could leave the contracting LSE with a limited number of alternatives to timely meet procurement obligations other than to renegotiate the PPA. Reducing the points awarded for a PPA balances CAISO’s desire to award points to projects with a PPA while reducing some of the incentive to sign a PPA purely to increase a project’s readiness score.  

Lastly, for the points awarded for a project that is “Included as a preferred resource in an LRA-approved LSE’s resource plan,” GSCE recommends this include LRA-approved LOIs between a developer and LSE. An LOI can provide a similar level of interest and commitment from an LSE, but an LOI can provide more current information than the LSE’s last approved resource plan.

Project attributes

GSCE requests clarification on what attributes specifically would be considered for alignment with a CPUC procurement order or non-CPUC jurisdictional LSE RFPs. Potential attributes that fit these two categories are broad.

Regarding non-CPUC jurisdictional LSE RFPs, it appears this could be captured by an offtaker interest letter or inclusion in the LSEs resource plan that allows for automatic inclusion in the queue. GSCE requests information on how these categories are distinguishable.

Additional categories

Although site control requirements to enter the queue are addressed by FERC Order 2023, the order only requires site control for the generating facility and not interconnection facilities. Land for the interconnection facilities, particularly the gen-tie line, can be difficult to secure. GSCE proposes that additional points be awarded for projects that have site control for their gen-tie.

In addition, the current proposal to award points for expansion of an existing facility where there is surplus capacity on the gen-tie line should be expanded to include new facilities that are also accessing an existing gen-tie line. This provides a similar level of certainty for a project and indicates a higher level of commercial readiness than a project that must construct a new gen-tie line.

D. Please provide feedback on auction design and use of auction revenues.

No comment

[1] CAISO, 2023 IPE initiative track 2, Straw Proposal, at 26, Sept. 21, 2023.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

GSCE supports continued use of Option B as it provides an additional method of expanding the transmission system and generation interconnection alternatives. We encourage CAISO to seek all means of funding additional transmission to allow for generation interconnection.

GSCE opposes limiting Option B to projects that are outside the priority transmission zones. Although Option B is being viewed as an option to allow projects to interconnect outside transmission zones, a stated goal of this initiative is to prioritize future generation in areas where transmission is being planned. Not allowing projects interested in Option B to interconnect in priority transmission zones undermines this goal. Further, Option B provides additional funding for transmission without cash reimbursement that is ultimately paid by ratepayers, meaning that allowing Option B in priority zones can increase funding for transmission in priority zones without transmission ratepayer funding. CAISO should encourage additional means for projects to finance transmission in zones that the state deems to be a priority.

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

1. TPD allocation

GSCE opposes the prohibition on energy only seeking deliverability unless it has reached commercial operation. With a cap on future interconnection requests and a firm time-in-queue limit, the issues created by energy only projects lingering in the queue while waiting for deliverability should be greatly reduced. Also, when these projects do have the chance to receive deliverability, they are often ideal to contract with because they are further along in development and can provide more immediate deliverable capacity to the RA program.

2. Interim Deliverability

No comment

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

 No comment.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

N/A

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

GreenGenStorage, LLC Draft Comments to

CAISO’s 2023 Interconnection Process Enhancements Straw Proposal

GreenGenStorage, LLC (GreenGen) appreciates the opportunity to submit comments to the CAISO’s 2023 Interconnection Process Enhancements Straw Proposal.

GreenGen is a California-based pumped storage hydro (PSH) development company that is permitting a pumped storage project in parts of Amador and Calaveras Counties, California. The Mokelumne Water Battery Project is an eight-hour, 400 megawatt pumped storage project that will store 3,200 megawatt-hours per day of clean, reliable, and dispatchable energy.[1]  The Project is anticipated to be online by 2030, thereby helping California meet its energy and emissions goals by providing reliable, long duration, carbon-free energy storage. The Project minimizes land and water impacts by taking advantage of existing infrastructure, including reservoirs and transmission facilities. As this Project is a long-lead time resource, GreenGen has been working collaboratively with stakeholders in the proposed Project vicinity, including resource agencies, Tribes, non-governmental organizations, and interested members of the public since 2018.

Comments on Section 4.2.4 Prioritization of Long Lead-Time Resources Specific to Resource Planning Portfolios

GreenGen appreciates CAISO’s ongoing commitment to the 2022 Memorandum of Understanding as part of a broader effort to tighten linkages among resource and transmission planning activities, interconnection processes, and resource procurement.[2] GreenGen believes that recent changes in FERC Order 2023 necessitate additional modifications to ensure that viable, long lead time pumped storage projects are properly identified in CPUC’s resource portfolio and thus timely incorporated into the CAISO transmission planning process.

Because FERC Order 2023 requires pumped storage projects to have a license prior to applying for interconnection[3], the IRP criteria for identifying pumped storage as a candidate resource need updating to provide the CPUC and CAISO enough lead time to better gauge project viability for resource planning and to support long lead time projects and resource diversity. GreenGen understands that for pumped storage to be considered a candidate resource in the IRP resource planning portfolio, the project must have a pre-liminary license and be in the CAISO queue. Relying on these factors alone, especially the requirement that a project be in the CAISO queue, to identify potential pumped storage candidate resources will result in the failure to consider and analyze viable projects and may result in the inclusion of projects that could face serious environmental and community opposition. Consequently, and to timely and properly analyze this long lead time, clean energy resource, the CPUC should exclude being in the CAISO queue as a requirement and include additional criteria when analyzing and considering what should be an approved candidate resource.

GreenGen proposes the following criteria be considered when analyzing pumped storage as a candidate: pre-liminary license, whether the project uses existing infrastructure, and its proximity to existing transmission. Without these important updates, pumped storage projects would not be included in the IRP resource planning portfolio, resulting in years before CAISO has visibility into viable long lead time resources because no pumped storage projects would be considered a candidate resource until it is both licensed and in the queue. Such a gap in the process will result in the failure to analyze and procure diverse and reliable resources to meet California’s climate goals and ensure grid reliability.[4]

From an affordability and risk perspective, if viable, long lead time projects are not being considered at the appropriate time in the resource and transmission planning processes, these projects will not be able to take advantage of the Inflation Reduction Act’s important investment tax credits, thus increasing costs for ratepayers and decreasing project viability. Additional implications include challenges in securing offtake agreements, lower priority in the interconnection queue, construction delays, and ultimately, delayed online dates. The financial commitment required to obtain a pumped storage license is substantial and such investments are not speculative. Licensing a pumped storage project takes years and millions of dollars. If there is a such a large gap between the lengthy and expensive permitting process and the project being included in a resource portfolio, studied in the planning process, and ultimately interconnection queue, investors are unlikely to continue funding such large infrastructure projects. 

GreenGen intends to raise these issues in the IRP proceeding, but given the interconnectedness of the resource planning and transmission processes, GreenGen needs to raise these important issues in multiple forums, to shine a light on the current challenges and potential unintended consequences resulting from the current standard for pumped storage, and potentially other long lead time resources.     

Comments on Section 4.1 The Zonal Approach

GreenGen supports the CAISO’s proposal to coordinate with the Local Regulatory Authorities (LRA) and non-CPUC jurisdictional entities to determine their approved resources in their individual IRPs to include in the transmission planning analysis. All non-CPUC jurisdictional entities load-serving entities should have a pathway for study by the CAISO that is separate from the CPUC’s study process, to interconnect with the CAISO grid to serve load.

GreenGen agrees with NCPA’s comments that the “universe of potential project locations cannot be limited to zones designated solely by the CPUC.”[5]  NCPA astutely notes that “most of the CPUC zones are in the south, while NCPA’s member loads and generation are located in the north, where transmission constraints often preclude the transfer of southern generation to the north.”[6] GreenGen believes it’s important to similarly support non-CPUC jurisdictional member utilities who engage in their own planning and resource procurement under the supervision of their respective LRA, so that there are alternative pathways to get long lead time resources, like pumped storage, studied, interconnected, and online in a timely manner.

In closing, we respectfully request that the CAISO consider the concerns laid out in comments and look holistically at the criteria that indirectly limits pumped storage from being considered part of the resource planning map sooner. We acknowledge that this requires continued dialogue with sister agencies to achieve our grid reliability goals and enable a more seamless transition to a clean energy future.

[1] FERC Docket P-14796. Filing can be accessed at: https://elibrary.ferc.gov/eLibrary/searchl; See also: https://greengenstorage.com/

[2] CAISO, CEC and COUC Memorandum of Understanding December 2022: https://www.caiso.com/Documents/ISO-CEC-and-CPUC-Memorandum-of-Understanding-Dec-2022.pdf

[3] See Improvements to Generator Interconnection Procedures and Agreements, A Rule Issued by the FERC on September 6, 2023 https://www.federalregister.gov/documents/2023/09/06/2023-16628/improvements-to-generator-interconnection-procedures-and-agreements. Paragraph 591 of FERC Order 2023 states that [f]or interconnection customers developing generating facilities at non-powered dams, we clarify that a FERC license 1191 can serve as a demonstration of site control under subpart (3). However, we also clarify that neither a Memorandum of Agreement with the U.S. Army Corps of Engineers regarding a proposed hydropower project at a U.S. Army Corps of Engineers dam nor a preliminary permit for a pumped storage project or other hydropower generating facility to be located on Tribal lands would be sufficient to demonstrate site control because we do not have enough information in this record to determine that such documentation provides sufficient evidence of the interconnection customer’s exclusive right to occupy a site of sufficient size to construct and operate a generating facility.”

[4] As it stands, CAISO has already signaled its intent to not open the next planning window until 2025, and will apply FERC Order 2023 to projects in Cluster 15. 

[5] https://stakeholdercenter.caiso.com/Comments/AllComments/1198f707-8b68-4560-bb9a-7dd64ea2b57d#org-27e3db69-fd35-4cf0-a1b2-f8f75781f49d

[6] Id.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

N/A

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

N/A

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

N/A

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

• CAISO needs to ensure that any priority zonal information is conveyed with sufficient time for interconnection customers to seek site control for their interconnection requests. CAISO has now indicated site control will be required for QC15 interconnection requests to be considered, per FERC Order 2023. Given the plan to start QC15 project evaluation in April 2024, GridStor is concerned that priority zone information will not be conveyed with sufficient lead time. If CAISO will require site control for QC15 projects to be evaluated, CAISO should delay the start of QC15 evaluation to allow 6-9 months for interconnection customers to establish site control. In parallel, CAISO should work to make zonal locational information available as soon as possible while the stakeholder process runs to avoid further delays to the QC15 cluster study.
   
• Since CAISO intends only to study projects within specified priority zones, CAISO must provide clear, precise, and definitive geographic boundaries that will allow interconnection customers to determine in advance whether an interconnection request will be within or outside of a specified priority zone. During the stakeholder call, CAISO staff did not commit to providing this information. To not do so creates an effective “black box” where CAISO staff will be able to deem interconnection requests as meriting study or not based on non-public, non-appealable criteria. In addition to creating confusion, lacking this information in the tariff or a process by which it is clearly understood would raise regulatory risk that FERC will reject the proposal based on its failure to meet FERC’s rule of reason test.[1]
   
• A list of all designated substations, including their available capacity, along with the MVA ratings of intra-connected lines and transformers within priority zones and interfaces between them is needed to ensure clarity on meeting siting criteria. By having a publicly available list of substations and interfaces included in each priority zone, projects will allow both transmission owners and interconnection customer to focus their resources on projects that can most quickly and cost effectively be connected to the grid.

[1] FERC uses its “rule of reason” policy to identify “provisions that significantly affect rates, terms, and conditions” and must therefore be part of the tariff, rather than a business practice manual.  Midcontinent Indep. Sys. Operator, Inc., 158 FERC ¶ 61,003 at P 69 (2017) (citing Cal. Indep. Sys. Operator Corp., 119 FERC ¶ 61,076 at P 656 (2007); Order No. 890-A, 121 FERC ¶ 61,297 at ¶¶ 988, 990 (2007) (“. . . we reiterate that each ISO and RTO must include in its OATT all of the rules, standards and practices that significantly affect the transmission service provided by the ISO or RTO. . .”).

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

• 1. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU.
      
• CAISO’s proposal to include indicators of commercial procurement at the time of an interconnection request is fundamentally disconnected from the process of commercial procurement. LSE and generators cannot agree on price and terms, including CODs, before either party even knows the cost and timeline for getting the project interconnected. To expect contracting before interconnection study is totally backwards, and CAISO should not use such criteria at the time of interconnection request. Developer cannot sign a serious term sheet when a COD could move more multiple years and costs could vary by tens of millions of dollars. More to the point, this approach would counterproductively create unnecessary delay, costs, and friction for interconnecting resources when changes to timelines and/or cost require term sheets to be re-evaluated, re-negotiated and ultimately re-approved by the PUC.
   
• Using commercial interest as a primary or significant criterion to evaluate the merit of an interconnection request will produce perverse incentives and is prone to gaming. Counterparties to provide “commercial interest” can be invented, affiliates can  deals with each other, and term sheets or even PPAs can be written in such a way as to be entirely renegotiated after successful interconnection study entry has been secured. Additionally, this would translate into higher costs for ratepayers, as developers cannot put their most aggressive pricing forward until they know the cost and timeline for interconnection. This approach can be a detriment to reliability and cost as FERC stated in Order 2023 where it found that allowing projects with a signed PPA to be deemed “commercially ready” to enter the queue could both inhibit competitive processes that consider interconnection costs and schedules and incentivize power purchasers to execute purchase contracts with ICs whose facilities may be later determined to be non-viable.[1] CAISO has not explained why it thinks its approach would not have those same outcomes or why the record developed at FERC is not applicable here.
   
• The nature of electricity markets requires free entry of suppliers so that they can make legitimate offers to buyers, LSEs or otherwise. To do otherwise, CAISO would effectively run a procurement process for its LSEs in all but name, running afoul of the foundations of open access. The single best way CAISO can steer the interconnection process toward LSE needs is to focus on speeding the completion of studies and network upgrade construction.
   

1. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO.

In light of the challenges outlined in the straw proposal, CAISO should first consider more workable alternatives to scoring criteria:

• First, upon review of the scoring criteria method that CAISO proposes, GridStor asks CAISO to reconsider a stage-gating approach that better aligns with development processes, an idea initially supported by PG&E and SDG&E in their earlier comments. Given the challenges CAISO describes for making scoring criteria workable at the time of an interconnection request, CAISO should revisit the stage-gating approach. By creating stage-gating criteria, CAISO would better be able to assess indicators of project success through the development process and make some of the desired criteria conceptually more workable. GridStor acknowledges this would represent a substantial shift in approach from the straw proposal, though we suggest this shift in recognition that it may be impossible to develop scoring criteria that are workable at the time of an interconnection request and represent a meaningful, holistic rationale for accepting or rejecting projects.
   
• Second, GridStor observes that CAISO has not yet implemented site control requirements for QC15 projects, and that many such projects were submitted without demonstration of site control. It is likely that many QC15 projects will be withdrawn once they are required to demonstrate site control. CAISO should consider delaying the implementation of any screening mechanisms until 3 months after study results are provided for QC15 so that all stakeholders can observe the extent to which site control addresses the problems CAISO has identified.

If CAISO determines to continue to advance the development of scoring criteria, then we make the following recommendations toward that end:

• Putting aside scoring criteria that are a proxy for commercial readiness (which are problematic and should not be used at the time of interconnection request, for reasons described above), CAISO’s proposal includes two types of scoring criteria for interconnection requests: those that are a proxy for project viability needs, which account for 42% (100 out of 240) attainable points, and those that are a proxy for system need, which account for 29% (70 out of 240) attainable points. GridStor recommends that, presuming criteria for commercial readiness are removed, criteria for system need and criteria for project viability should have the same attainable point values (e.g., each category together represents 50% of attainable points). Doing so will reduce the bias of CAISO interconnection requests toward projects with higher viability that do not reflect system needs. CAISO should accomplish this by increasing points for system need criteria, decreasing points for project viability criteria, or some combination thereof.
   
  • Criteria that reflect “Permitting status” should have a lower point value overall. GridStor acknowledges CAISO’s concern that unavailability or delay of permits is a significant challenge to successful interconnections, and early indications of success in permitting are valuable. However, conditional use permits and other relevant permits in California typically have a shelf life of 1-2 years, which is shorter than even a speedier interconnection process envisioned in this initiative. A valid permit at the time of an interconnection request will no longer be valid by the time a developer gets to NTP, particularly as the length of time for network upgrade construction has extended. Indications of starting permitting may not prove consequential to ultimate success. In light of these issues and without criteria that more clearly proxy viability in this domain, CAISO should reduce the point value of its listed permitting criteria.
     
    • Additionally, an overemphasis on permitting will result in studying primarily projects farther from dense load areas where much of the California system need is located, now and in the future.
       
    • It is worth noting that the CEC permitting process pursuant to AB 205 is novel and has not been proven. The process features only one applicant to date, and the CEC has repeatedly declined to deem that application complete and begin the actual permitting process.

• • The criterion for “Expansion of an existing facility” should be modified to focus on sites adjacent to substations, with a separate criterion to include all development on previously disturbed sites, not just those engaged in bulk electric power supply. Absent these changes, CAISO should assigned a lower point value to expansions of existing facilities.

• • • CAISO should instead award points to “projects that are adjacent to substations (i.e., no gen-tie required) that have spare interconnection capacity,” rather than expansions of existing facilities where no such capability is guaranteed. As CAISO staff indicated on the September 28 IPE working group call, the purpose of this criterion is as a proxy for viability of an interconnection requests, based on an assumption that sites at or adjacent to existing electric facilities would be easier to permit and/or faster to construct. Yet the existence of an operating facility does not meaningfully correspond to either concept—particularly if significant network upgrades will be needed anyway to complete interconnection of that expansion. A feature that is most likely to speed interconnection is siting adjacent to substations where capacity already exists, and CAISO may accomplish similar goals by awarding points to this characteristic instead.

• • • Separately, CAISO should recast this criterion to cover interconnection requests that use previously disturbed sites, not just sites that already host operating power system resources. Numerous large commercial & industrial sites feature similar characteristics as bulk electric power facilities, and they should be extended the same assumptions as bulk power facilities regarding ease of permitting and construction. In some instances, the permitting and construction may be faster than for sites hosting bulk electric supply resources, such as sites already zoned for industrial use without operating facilities, electric or otherwise.
       
    • Should CAISO ultimately determine to keep this criterion as proposed, it should be scored significantly lower to avoid running afoul of open access principles. This criterion as designed would mean that CAISO privileges existing interconnection customers’ new requests over those of other interconnection customers. It is contrary to open access principles that a key determinant of an interconnection request’s acceptance could hinge on an interconnection customer’s control of already-interconnected resources, even where no spare capacity is otherwise available. (The criterion identifying spare capacity on a gen-tie makes sense, as it represents underutilized interconnection capacity.) Should CAISO ultimately determine to keep this criterion as proposed, given the number of screens being applied to interconnection requests already, reducing point value – from 16% (40 out of 240) to 5% (12 out of 240) of total points attainable – would avoid undue preference to prior interconnection customers.

• GridStor supports the criterion for “Ability to provide Local RA in an LCRA with ISO demonstrated need for local capacity in that area” with modification. We recommend that the language of this criterion focus on the ability to provide local resource adequacy in LCRAs, regardless of “ISO demonstrated need.” The LCR Report compiled each year by CAISO only looks forward in time 4 years. However, the need for local RA may be anticipated farther out in time, such as due to deactivation of other resources, load growth, or other known factors. Indeed, the CPUC’s IRP and its inputs to the TPP look out at least 10 years to identify system needs. It is highly likely that much of the natural gas facilities that currently provide local RA are expected to be retired pursuant to state statutory requirements to reduce greenhouse gas emissions—and in fact may be able to do so precisely because other local RA resources are built to enable that retirement. Additionally, the process for interconnection completions at present may take as long or longer than the 4-year horizon of the LCR Report. Finally, prices for local RA appear to not correlate with LCR reported levels of deficiency. For that reason, CAISO should eliminate the demonstration of need in light of that longer horizon.
   
• GridStor supports the criterion for “Location in load pockets and not needing ADNUs.” We request CAISO clarify that the determination of “not needing ADNUs” will refer to “not needing ADNUs at the time directly preceding the interconnection request stage (e.g., 2 months before the window opens). We also request clarification on the definition of “load pocket” and recommend that CAISO convey that geographic information to interconnection customers, preferably at the same time as it convey geographic information on the priority zones for interconnection study.
   
• GridStor opposes inclusion of the locational criterion of “Energy community as defined by Internal Revenue Service guidance in the Inflation Reduction Act.” First, sites that qualify as energy communities are already strongly incentivized and highly sought by interconnection customers; adding additional ISO incentives for energy communities siting does not add value and will only intensify the competition for sites—and thus costs—that interconnection customers will take on to score well for interconnection requests. Second, energy communities sites—which pertain only to brownfield designation, proximity to retired coal facilities, and relative unemployment & shares of fossil sector employment—are not a meaningful proxy for either system need or project viability and do not add meaningfully to CAISO’s overall aims. Third, energy communities designations will change annually according to recently-issued IRS guidance, and interconnection customers are likely to site projects in locations that are anticipated to become energy communities in future years, even if those are not designated sites during the year of the interconnection request. To the extent that CAISO sees aligned public interests inherent in the definition of energy communities, it is best to call those out specifically and create stable criteria that make sense to assess at the time of an interconnection request. For example, if CAISO sees public interest in siting projects on qualified brownfields, then it should make that a separate criterion.
   
  • Additionally, it is worth noting that energy communities designations associated with fossil asset transition only apply to coal mines and coal plants. California lacks both in any meaningful degree. To the extent CAISO wishes to adapt public interests in energy equite it sees reflected in energy communities designation, CAISO should consider more state-appropriate environmental justice criteria, such as siting in NAAQS non-attainment zones, as an alternative to a criterion for IRS energy communities.

• GridStor asks for clarification on the criterion of “Meets the requirements of a current CPUC procurement order or non-jurisdictional LSE’s RFP.” Specifically, we ask CAISO to indicate, for example, what aspects of the CPUC’s recent MTR procurement order would or would not be deemed as a project requirement.

• 1. 1. Please indicate interest in participating in a workgroup to refine scoring criteria.
         
• GridStor strongly supports a working group to refine scoring criteria.  Such an approach is important to avoid unintended consequences. Gridstor has a strong interest in participating and urges CAISO to establish the meeting schedule early so that parties can have sufficient notice for participation.

• d. Please provide feedback on auction design and use of auction revenues.
   
• Portfolio diversity is a means by which to reduce risk. To the extent that CAISO needs a tie-breaking method other than auctions, it may make sense to examine the tied projects and choose either (a) the project(s) that add greatest diversity to the cluster (based on some calculation of divergence of project criteria scores from median scores in the rest of the cluster) or (b) adjust the 150% limit up to accommodate all projects on the scoring margin.
   
• Auction bids/financial securities transferred from interconnection customers to the CAISO should be fully refundable in the event of penalty-free withdrawals, triggered either (1) by FERC Order 2023 criteria regarding change in network upgrade costs or (2) by study errors or omissions that result in a change in timeline of greater than 12 months, per Appendix DD Section 6.8.
   

GridStor strongly encourages CAISO to also make such penalty-free withdrawal available if the results of the single-stage study process indicate a timeline for interconnection completion more than 3 years. We are experiencing a higher interest rate environment that is likely to persist and represents a significant break from the past two decades of power system investment. Higher real medium- and long-term rates mean that interconnection customers face significant costs to CAISO holding security deposits of significant value for extended periods of time. Interconnection customers that bid into auctions are being asked to lock even more expensive capital up without knowing how soon that capital will be returned. For that reason, CAISO should ensure that interconnection customers do not wear substantial cost and risk for extended periods of time by creating an option for penalty free withdrawal when interconnection study reports indicate a completion timeline is expected to exceed 3 years.
 

[1] Improvements to Generator Interconnection Procedures and Agreements, Order No. 2023, 184 FERC ¶ 61,054 (2023) at P 694 - P 698.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

No comments at present

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

• b. Interim Deliverability
   
• GridStor supports the concept of “conditional deliverability” that has been proposed in the related Generator Deliverability Method initiative. Any temporary/interim/conditional deliverability status short of a final determination of deliverability will only be of value if it can form the basis of contracting—for that reason, CAISO should make explicit that conditional deliverability will be non-revocable once awarded. Additionally, the criteria for attaining that status should be clearly defined, with threshold of risk used to assess those operational risks as reasonable.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

No comments at present

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

Hydrostor appreciates the opportunity to provide comments on the CAISO’s 2023 Interconnection Process Enhancements Track 2 Straw Proposal.  We agree improvements and changes are needed to the interconnection process in order to achieve the goal of “rapid deployment of new generation for reliability, affordability and decarbonization” including the important role that resources such as long duration energy storage may play.

Hydrostor supports the proposal of the CAISO to provide information on the priority transmission zones prior to the interconnection request window and believes that this is critical for efficient siting of major energy infrastructure. We understand that the proposal to provide data is currently centered on the “heat map” and associated information as required under FERC Order 2023 and that this would be provided by Q3 / Q4 2024.  While we generally support this, we are concerned that this timing may be too late to inform decisions by developers with respect to Cluster 15 and would appreciate the CAISO providing as much information as possible in the interim (i.e. the proposed diagrams clearly identifying the boundaries of the zones/area, location of resources in the portfolios and the queue, the affected stations and the available TPD for allocation behind each of the transmission constraints). 

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

Incorporation of LSE interest and commercial procurement activities earlier in the interconnection process may be appropriate (e.g. higher ranking of projects with LSE interest as appears to be proposed in the scoring criteria).  However, LSE interest and commercial procurement for many resources, particularly long-lead time resources, may be contingent on timely action by the CPUC including appropriate allowances for the COD of such long-lead time resources.  Per the MOU, “the CPUC will provide direction, to the extent appropriate, to pursue resources with the operational characteristics and geographic locations consistent with the resource planning conducted by the CES and CPUC, and the transmission planning conducted by the ISO based on that resource planning”. We encourage the CAISO to work with the CPUC to ensure technology diversity is taken into account as part of the planning and procurement process.      

As it relates to the scoring criteria, Hydrostor provides the following comments:

• It is unclear whether “Interest from an offtaker” and “Commercial readiness” (shortlisted, executed term sheet, executed PPA etc.) are duplicative in relation to scoring.
• The rationale for prioritizing “Expansion of an operational facility” over a new facility in the scoring is unclear.  This may bias priority in the interconnection queue to existing facilities including retention / expansion of thermal generating facilities in some cases versus encouraging innovation and technology diversity.
• In the straw proposal, the CAISO has elected to not include diversity adders and prioritization of specific resource types.  We encourage the CAISO to reconsider this approach.  It has indicated that “[c]onformance with IRP scenarios and state policy needs should be inherent in the zonal approach, which is based on CEC and CPUC resource planning” and “[i]ncluding scoring criteria may result in double-counting the same analysis”.  However, it is not evident where in the proposed scoring criteria there is a conformance with the IRP scenarios.  The reality is that many LSE IRPs continue to be dominated by the same types of resources (e.g. solar and short duration energy storage) without consideration of technology diversity.  We do believe that there needs to be appropriate prioritization of long lead-time resources including many long-duration energy storage resources in the scoring criteria. 

Hydrostor reserves comments on the auction design at this time.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

Hydrostor has comments at this time on this matter.

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

As it relates to TPD allocation, Hydrostor agrees with other stakeholders that there may need to be “specific mechanisms to recognize the unique need for certain long lead-time resources in the interconnection process” and “transmission capacity is reserved for … specific technologies”.  Many long duration energy storage resources are also long-lead time resources and have unique development considerations that are not necessarily aligned with CAISO interconnection timelines and processes. Hydrostor believes that changes may be required in order to ensure equitable access to the interconnection queue for long-lead time resources as well as to encourage technology and resource diversity on the grid.  Technology diversity will be critical to achieving California’s decarbonization, reliability and affordability goals and the interconnection process should not be an impediment to this.

The CAISO notes that “[l]onger-term procurement may be appropriate and aligned with the MOU, so that LSEs are contracting for these resources with longer lead times on a timely basis.” Hydrostor believes that this is a worthwhile objective but interconnection processes including TPD allocation procedures may need to be refined in order to accommodate long lead-time resources. There may also need to be other changes at the CPUC and CEC to achieve this objective and “tighten linkages among resource and transmission planning activities, interconnection processes, and resource procurement”. 

Hydrostor looks forward to engaging further with the CAISO as the TPD allocation process is refined (which we understand will take place after the details related to the scoring criteria and zonal study process are developed). Hydrostor would also support the formation of a subgroup to develop a more refined proposal.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

Hydrostor has no comments at this time.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

The Independent Energy Producers Association (IEP) requests any data provided to stakeholders to enable the zonal approach to be made public on CAISO’s generation interconnection website page at least six months prior to the opening of the queue. It is essential data be made public timely for development of the transmission planning process.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

IEP finds that the development of effective scoring criteria for prioritization to study will be sufficient to reduce the number of interconnection requests that are infeasible and clog the queue. Limiting a developer’s request in a cluster window to 25 percent of available transmission capacity is duplicative and unnecessary if workable scoring criteria are developed. IEP respectfully requests the 25 percent limit be removed from this proposal.

Further, this proposal references a “developer” within the scoring criteria but does not define it. IEP proposes CAISO define a developer as an “interconnection customer.” IEP supports, and will join as a participant, in the development of a “scoring criteria for prioritization to study” sub-workgroup. A meeting of the minds on scoring criteria is the most efficient way to ensure requests put through the queue are plausible and commercially viable. IEP recommends CAISO pause the approval of all proposed scoring criteria until the sub-workgroup has convened and come to a consensus on workable criteria. 

Finally, IEP does not support an auction when viability scoring does not limit proposed capacity to 150 percent of available capacity in the zone. The development of an auction process, at this time of queue reform, is premature. Detailed and specific scoring criteria, determined through a stakeholder sub-workgroup,  will limit the need for an auction. If, however, following stringent scoring criteria, a tie does arise, then an auction between only those two tied bids should occur. Requiring an auction prior to a tie costs all parties additional money and will result in stale bids and slow the queue yet again.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

IEP has no comment on the Option B process proposal.

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

IEP has no comment on proposed modifications to Transmission Plan Deliverability and Interim Deliverability at this time.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

IEP does not support the imposition of an unavoidable time-in-queue requirement for all projects in the queue without executed GIAs because there already is a limitation for signing an interconnection agreement. If the agreement is not satisfied, then developers can file at FERC. This proposed requirement is unnecessary.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

As raised in prior Intersect Power comments submitted June 14, 2023, Intersect Power remains opposed to the establishment of capacity caps implemented on a zonal level and strongly encourages the CAISO to instead take a simpler approach by implementing a reasonable maximum total queue capacity and maximum number of projects for each Cluster. The zonal approach has several unnecessary complications including, but not limited to: (i) necessity to accurately define the zones geographically / electrically, (ii) determination of the base zonal capacities (which are inherently dynamic and heavily influenced by processes such as the TPP), (iii) rationalization and establishment of an arbitrary zonal capacity buffer (e.g., 150% of available or planned capacity), and (iv) necessity for bespoke Option B pathways.

If the CAISO is not willing to revert to an overall Cluster capacity + project quantity cap, Intersect Power offers the following commentary on the proposed zonal structure.

General Information Form/Timing:  AES’ proposal for an “Annual Interconnection Overview Report,” would be one way to provide regular, consolidated information in a usable format.  The data should be internally consistent, and provided at least 6 months before opening of each IR application window.

Information Needed for IR Submittal:

• Definition of “available transmission capacity”
  • Clearly articulate how the “150%” figure would be determined – e.g., whether “available transmission capacity” means deliverability capacity or interconnection capacity. In addition to determination of the 150% limit, this determination impacts how projects would be counted against that limit. For example:
    • If that means interconnection capacity, a 1000MW project at the POI would be counted for this purpose as 1000MW regardless of composition. 
    • If that means deliverability capacity, a 1000MW project at the POI with 100MW of storage and 900MW of solar would be counted as about (100 + (10% of 900) =) 190 MW (assuming the proposed SSN elimination). 
  • In other words, under this “available transmission capacity” construct, presumably Energy Only co-located capacity, or potentially Energy Only stand-alone projects, would not count against the 150% limit and need not be subject to the scoring criteria, since they do not require deliverability. In other words, they could automatically be accepted for study regardless of viability score.
• Clearly Defined Zonal Boundaries
  • A proposal that leans so heavily on transmission zones is simply not viable without clear and useful information about the boundaries of those zones.  Intersect Power understands that this is a complex topic, but the applicable rules and options for submitted projects, and potentially their very viability, would depend on whether they are located within or outside the zonal boundaries.  Moreover, the CAISO should want to encourage projects to be located within the zones, so the CAISO must provide guidance to facilitate those locational decisions. 
  • The boundaries should be defined in a similar manner as the descriptions in the Local Capacity Technical Studies, i.e., which substations and transmission lines are within and outside the zones, with accompanying single-line diagrams.  These boundaries could change from year to year (unlike those for Local Capacity Areas, which have been held static) for different Cluster intake windows, with adequate advance notice (see above).
  • The CAISO should also clarify that the transmission upgrades approved in the 2022-2023 Transmission Plan will be used for both defining the zones and their “available transmission” for Cluster 15 and the upcoming TPD Allocation process.

C15 Project Locations & Capacities:  Consistent with the comments above about locational boundaries, the CAISO should clarify which C15 projects are inside and outside the proposed transmission zones.   Further, the CAISO should clarify how much available transmission capacity is in each zone and how much capacity (as applicable to the definition of available transmission capacity) has been filed into C15 in each zone). These clarifications should take place now, and not when CAISO resumes C15 activities in mid-2024, so developers will have a strong signal to continue development activities, or accelerate activities where applicable, for projects inside the zones, and to consider withdrawal or other options for those outside the zones.  It is in the interest of the CAISO, LSE buyers, and developers to help ensure that C15 projects are as prepared as possible to participate in the viability-scoring process.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU.

Intersect Power has continued concern about how LSEs will be able to evaluate projects with little or no advance cost or timing information, and we agree with others that PPAs or other commitments this early in the process are likely to contain so many off-ramps that they will be of limited value in determining viability. Further, LSE interest at this stage would likely be purely relationship-based (i.e., counterparty familiarity) and less a reflection of an individual project’s viability and feasible timing. 

In general, Intersect Power does not agree with incorporating LSE interest in ways that supersede project viability measures.  In particular, Intersect Power opposes allowing specific resources in regulator-approved resource plans for non-CPUC jurisdictional LSEs to automatically qualify for study outside the points system, with their capacity subtracted from the available 150% amount in the applicable transmission zones.  Intersect Power agrees with CalCCA and Sonoma Clean Power (SCP) objections at the 9/28 stakeholder meeting to this undue preference and ability to sidestep the viability-assessment scoring process.

The CalCCA and SCP objections were based on the fact that CPUC-jurisdictional LSEs may also have resource plans with specific projects, but Intersect Power objects more generally to allowing such LSE preferences – regardless of the regulatory authority – to overwrite the project viability scoring. 

b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements.

Intersect Power does not support the proposed auction feature, because:

• Lack of stakeholder support for an auction approach.
• Lack of early information on which to base a bid price.
• This is a complicated solution that would likely be rarely used – only for projects in areas with available capacity, only where the complex, multi-factor scoring results in ties between projects that happen to be on the margin for the 150% cut-off.  Simpler solutions should be considered, like pro rata study awards (e.g., projects could downsize to match their awards) or allowing the capacity studies to slightly exceed the 150% threshold (e.g., to 153%).

The CAISO said at the 9/28 stakeholder meeting that it does not want to use pro rata awards, because it believes that would add additional steps to the process (e.g., downsizing decisions) before studies could begin.  However, this minor additional administrative activity would be far less than needed to hold and track/monitor an auction process.

c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO.

Intersect Power defers commentary to the pending workgroup.

i. Please indicate interest in participating in a workgroup to refine scoring criteria.

            Intersect Power is interested in participating in a workgroup on this topic.

d. Please provide feedback on auction design and use of auction revenues.

Intersect Power does not support the proposed auction approach (see response to 2.b. above).

Issues not in the Comment Template

Process Improvements:  The CAISO should implement earlier SCE/PTO proposals to simplify the interconnection request (IR), modeling, and MMA processes – those were not mentioned in the Proposal.

Specifically, Intersect Power supports: (i) the PG&E and SDG&E proposals for simplified IR packages, and (ii) the SCE proposal to use standard models for each technology, instead of detailed project-specific modeling.  Both sets of proposals would defer project-specific details until much later in the interconnection process, until after the point where many projects typically drop out, reducing the burden of the process overall.  While adjustments may need to be made depending on the expected single-study process, Intersect Power still believes that these ideas may have merit and could considerably reduce the time and effort to prepare and assess IRs and later modifications.

Cluster 15 Process:  The CAISO should clarify the following, with respect to Cluster 15:

• Which Order 2023 provisions will apply to these already-submitted IRs, e.g., Site Control.  This clarification should take place now, and not wait until the CAISO’s December Draft Final Proposal in this initiative or December compliance filing, so developers have time for activities such as increased site-control compliance actions.
• How the CAISO would apply its stated preference to apply the viability screening criteria before continuing the validation process, given C15 opportunities to modify projects when the process resumes in April-May, and the September 2024 validation deadline.

25% Developer Limit: Intersect Power strongly opposes the implementation of a developer cap.  There is no basis for this number, no differentiation between concerns in specific areas and applications spread throughout the system, and no indication that this problem has ever occurred.

“Qualified non-LSEs:” The Proposal says procurement interest from such entities would be considered, but the CAISO should clarify how such entities would be “qualified.”

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

Intersect Power doesn’t believe the changes for Option B projects are sufficient to incentivize an Interconnection Customer to elect Option B, and thus, CAISO will continue to see a complete lack of participation for this option. However, further disincentivizing Option B projects by limiting their participation to zones that have no available TPD is unwarranted and counterintuitive when considered in conjunction with the CAISO’s proposed revisions for Option B obligations. If projects are willing to put forth the proposed financial security postings required of Option B projects, they should be permitted to participate in the interconnection study process irrespective of whether a zone has existing or planned TPD available. Option B projects are self-funding upgrades which will create additional TPD (perhaps even in excess of the proposed generation), which is a result that should be encouraged, not discouraged, by the CAISO. Eventually (and likely very soon if the CAISO’s proposals herein are fully implemented) many zones that exhibit substantial commercial interest will no longer have available TPD, and thus, will qualify for Option B projects under the CAISO’s proposal, but limiting their ability to participate now simply delays the timing of when beneficial upgrades, financed by Interconnection Customers, can be triggered, and ultimately completed.

Study Process Topic not Included in the Comment Template

C15 Interconnection Study and GIA Execution Timing

• Details on the studies to be performed, and the process and timing for study and GIA executions, are urgently needed to support project development activities.  These details should be released as soon as possible, but no later than the Draft Final Proposal.

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

a. TPD allocation

The CAISO should provide much more clarity about upgrades needed for FCDS/PCDS when a project receives TPD awards, and regular updates when things change.  This information should also be provided to projects already holding TPD awards, many of which do not receive it until shortly before their projects are coming on-line, when it is too late to adjust arrangements like PPA deliverability commitments.

b. Interim Deliverability

The Proposal retains the earlier CAISO commitment to consider multi-year ID, for the period between project COD and upgrade completion for FCDS/PCDS.  Intersect Power strongly supports this idea, in both the Deliverability Assessment Review initiative and this one, because it would help provide contractable assurance of available Interim Deliverability, but more details are needed.

While Intersect Power understands the difficulties of determining Interim Deliverability over a multi-year period, and further in advance, the CAISO needs to find a way to keep project CODs on-track and reduce the need for developers from having to postpone their CODs to avoid risks from long-lead-time upgrades delaying FCDS/PCDS deliverability status.   

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects?

Intersect Power appreciates the CAISO’s consideration of this proposal but continues to believe that it is short-sighted to focus only on upgrades assigned to withdrawing projects.  PTO and ratepayer funding will be reduced by elimination of upgrades assigned to later-queued projects, and this element is not considered at all in the proposal.

The deferral of refunds generally will reduce the incentive for projects to elect this option given the potentially long lead times for the refunds, so reduction of this withholding through consideration of these other benefits would help mitigate that undermining of the incentive.

b. Are the updates to the Limited Operation Study sufficient?

The updates are appreciated, but they are not sufficient. For many utility-scale projects, 9 months prior to Initial Synchronization will not provide sufficient clarity and certainty to support a project financing process to raise the capital needed to commence construction. At the point in time that an Interconnection Customer has issued NTP under the LGIA and submitted the accompanying financial deposits, it should be provided the opportunity to request an LOS and have a firm determination of the ability to achieve Initial Synchronization.

c. Comments on adding asynchronous generating facility requirements in the SGIA

No comments.

d. Comments on removal of suspension rights

Intersect Power does not support this proposal and is still unclear why this is necessary.

e. Comments on TPD Transferability proposal

Intersect Power does not support CAISO’s efforts to implement further restrictions on the transfer of deliverability. Proper safeguards are already in place via TPD retention criteria and CVCs to address CAISO’s concerns. Further, no data has been presented by the CAISO identifying an actual problem necessitating the proposed reforms.

f. Comments on viability criteria and time-in-queue limit

Intersect Power supports the CAISO’s proposals regarding deadlines to execute an LGIA and provide the Third Posting based on time-in-queue.

g. Comments on project Modification updates

Intersect Power is pleased that the Proposal does not adopt earlier proposals to limit the timing or number of MMA requests.  Intersect Power is still disappointed that the CAISO did not adopt any expansion of revisions that could be made without MMA requests.

h. Comments on postings for shared network upgrades

Intersect Power supports this proposal. Intersect Power also encourages the CAISO to extend this concept to Pre-Cursor Network Upgrades (PNUs). For example, if a project issues NTP and provides the Third Posting and has identified PNUs, the parties responsible for those PNUs should be required to fully fund those upgrades at that time. This will become less of an issue if the CAISO institutes the time-in-queue Third Posting requirements as described in the Straw Proposal, but that’s not a valid reason to omit the concept now.

i. Comments on timing of incorporating MMAs into the GIA

Intersect Power supports this proposal as long as NRIP qualifying criteria are revised to accept MMA approvals in lieu of updated GIAs.

Additionally, Intersect Power encourages the CAISO to take this one-step further and seek to eliminate LGIA amendments entirely as a result of MMA approvals. If the final outcome of an approved MMA is enforceable without having the LGIA amended (which is Intersect Power’s experience to-date on multiple projects that have achieved Commercial Operations), then the process of amending the LGIA is a mere formality and is unnecessarily consuming a large amount of valuable PTO and CAISO resources to support. Intersect Power encourages CAISO to better formalize the understanding that MMA approvals are effective and enforceable within the Tariff and/or Pro Forma LGIA so that financing parties can confidently rely upon the final MMA approvals, in lieu of an amended LGIA, which should eliminate the push from Interconnection Customers to make the subsequent revisions to the LGIA.

j. Comments on timing on starting network upgrades

Intersect Power supports this proposal, since an NTP from the Interconnection Customer means nothing if the PTO does not then proceed. Additionally, the CAISO should seek to impose an obligation for the PTO to commence, in a timely manner, their work upon receipt of NTP, and lack of action, and supporting evidence, on behalf of the PTO should warrant consequences.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

LRE is supportive of the CAISO providing additional data to stakeholders to enable the zonal approach to interconnection. As a general rule, more information will result in better projects overall as developers will have more insight into system needs when planning their projects. LRE is supportive of the content of the information the CAISO is proposing and instead offers comments on the format. The CAISO has pointed to several sources of data in its proposal that can aid in informing developers of the availability on the system, but those data are in different configurations, are on different websites, and are owned by different entities. This can create confusion for developers when the information is dispersed and not presented in a consistent manner. LRE recommends that the CAISO develop a centralized location with information that is updated prior to the opening of an interconnection window that prospective interconnection customers can visit when planning their projects.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

a. LRE does not offer comments on this proposal component. 

b. Although LRE is supportive of developing a comprehensive scoring criteria, LRE is concerned that if the criteria are not sufficiently granular to distinguish between projects with similar, yet not identical readiness characteristics, then a large portion of interconnecting projects will receive the same score. This is particularly concerning because if more projects have the same score, the likelihood of needing the auction to determine which projects are ultimately studied increases. As described further in response 2(d), LRE is wary that the proposed auction structure favors companies with deeper pockets rather than evaluating projects on their merits, or simply studying all projects that have equal merits. In this sense, LRE views the 150% availability cap as an arbitrary cutoff. There is no procedural justification for why the CAISO cannot study every proposal of equal scoring that crosses the 150% threshold, and instead proposes to move toward a complicated auction structure that discriminates against smaller companies. A sufficiently granular scoring criteria obviates the need for such an auction because it minimizes the likelihood that large tranches of projects will have identical scores, and thereby avoids problems with equity. 

c. LRE supports comprehensive scoring criteria that use the combination of a quantitative and qualitative approach to evaluate projects. A well-defined scoring rubric gives developers a clear target to plan to and will likely result in more viable projects overall. LRE encourages the CAISO to continue developing granular criteria to more effectively compare projects. For instance, in the example criteria posted, “Indication of community support” is worth 5 points. However, it is not clear what constitutes an indication of community support. Is this a letter from the local mayor, a letter of support from multiple landowners adjacent to the project, a letter from just one landowner, or simply supportive comments on social media? Are all of these types of support worth the full 5 points or is there an option for “partial credit” within this scoring system? This is just one of myriad examples where the CAISO could more fully flesh out the scoring criteria so that it can better distinguish between projects.  

i. LRE would like to participate in a workgroup to develop scoring criteria 

d. LRE is concerned about the discriminatory nature of the tie-breaker auction because it offers a path for larger companies to buy their way into the study process while bypassing projects that are deemed equally viable. LRE agrees that interconnecting customers should be responsible for any costs associated with interconnecting their projects and they should be on the hook for any penalties if they fail to do so. However, interconnecting customers should not be expected to pay additional, irrelevant costs that are entirely disconnected from interconnection simply because: 1) the CAISO was not able to develop a scoring system comprehensive enough to distinguish between projects, and 2) the CAISO refuses to study effectively identical projects above an arbitrary 150% availability limit. By the CAISO’s own scoring criteria, all projects relegated to each auction will be equal regardless of the size of the company that submitted the project. Yet, the construct of the auction means that larger companies will be well positioned to buy their way into the study process over smaller companies simply because of the structure of their company, not the merits of their project. A simple solution to this discriminatory problem is to create a well-defined, granular scoring criteria that minimizes the occurrence of tied scores and then allow all tied projects that pass the 150% limit to move on to the study phase.  

An additional concern with the auction regards the sealed bids that must be submitted with their interconnection request. If a company only offers one project into the queue at a time, it is relatively easy for that company to evaluate the additional capital it is willing to offer in the bid should the project be relegated to the auction. However, many companies offer multiple projects into one interconnection window at a time. Not knowing which projects or how many projects will ultimately end up in the auction means that companies will have trouble structuring their bids. For example, if a company offers 10 projects into the queue and all 10 go to auction, the amount of capital the company would have been able to bid for each project is far less than if only one had gone to auction. Therefore, requiring companies to provide sealed bids before knowing if they will even participate in the auction can dramatically change the results. In this way, the value of the sealed bids may be more of a reflection of the uncertainty interconnecting customers have in CAISO’s process than uncertainty in their own projects. 

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

LRE does not offer comments on this proposal component. 

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

LRE does not offer comments on these proposal components. 

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

LRE does not offer comments on every question component and instead offers feedback on the following: e. TPD transferability process, f. time-in-queue limit. 

e. LRE believes the TPD transferability proposal is too limited and may prevent otherwise viable projects with similar commercial operation dates from coming online. Although LRE understands the CAISO’s need to limit transfers that may prolong unused TPD reservations and further delay processes, the proposed solution over-corrects and eliminates what could be a workable alternative that could result in a project coming online sooner. To avoid this over-correction, LRE recommends that the CAISO continue to allow TPD transfers in situations where the transferee project has an earlier COD than the transferor project. The transferee project would then be subject to the same tariff requirements as the transferor project. This change would alleviate CAISO’s concern about delays while still maintaining flexibility in the interconnection process. In situations where projects with TPD allocation may no longer be feasible, this modification allows a viable project an easy path to obtain the TPD allocation and bring additional reliability quickly onto the grid. Without this change, the alternative is having the non-viable project sit idle on the TPD allocation or having to wait for a new queue cycle before allocating that TPD. 

f. LRE supports the time-in-queue limits proposed by the CAISO. However, LRE stresses that if time limits are imposed on interconnecting customers, then the CAISO and the TOs should be required to respond to interconnecting customers within a reasonable timeframe to allow interconnecting customers to reach their deadlines.  

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

General information form/timing 

The CAISO should provide internally consistent information, in a consolidated and usable format, in place of the current disparate and hard-to-reconcile information.  AES’ proposal for an “Annual Interconnection Overview Report” would be one way to meet that need.  The data should be provided at least 6 months before opening of each IR application window (ideally, at least 12 months in advance, given new site control and other time-intensive requirements).

LSA agrees with several stakeholders that earlier contracting and other activities for both LSEs and developers would be facilitated if this initial information could contain estimates of costs or COD timing.  LSA supports the AES proposal for inclusion of transparent price ranges per MW for interconnection in each zone, with a price cap.

Information needed for IR submittal (and Cluster 15 screening – see below) includes:

• Clearly defined zonal boundaries.  A proposal that leans so heavily on transmission zones is simply not viable without clear and useful information about the boundaries of those zones.  LSA understands that this is a complex topic, but the applicable rules and options for submitted projects, and potentially their very viability, would depend on whether they are located within or outside the zonal boundaries.  Moreover, the CAISO should want to encourage projects to locate within the zones, and avoid locations outside the zones, so the CAISO must provide guidance to facilitate those locational decisions.    

The boundaries should be defined in a similar manner as the descriptions in the Local Capacity Technical Studies, i.e., which substations and transmission lines are within and outside the zones, with accompanying single-line diagrams.  These boundaries could change from year to year (unlike those for Local Capacity Areas, which have been held static) for different cluster intake windows, with adequate advance notice (see above).

The CAISO should also clarify that the transmission upgrades approved in the 2022-2023 Transmission Plan will be used for both defining the zones and their “available transmission” for Cluster 15 and the upcoming TPD Allocation process.

• Available Transmission Plan Deliverability (TPD) for each zone, and for smaller areas within zones if intra-zonal constraints exist.  This information should include any differences by voltage level; for example, recent PG&E-area overload mitigation measures included moving generation mapped to certain busbars to higher voltages.  The CAISO should ensure that developers can tell which voltage levels have available capacity and which do not. 

• Physical interconnection information, e.g., available positions within substations and substation expansion potential.  This information should include any reliability-based constraints on interconnection, e.g., circuit-breaker loading.

C15 project locations 

Consistent with the comments above about locational boundaries, the CAISO should clarify which C15 projects are inside and outside the proposed transmission zones.   This clarification should take place now, and not when CAISO resumes C15 activities in mid-2024, so developers will have a strong signal to continue development activities for projects inside the zones, and to consider withdrawal or other options for those outside the zones.  It is in the interest of the CAISO, LSE buyers, and developers to help ensure that C15 projects are as prepared as possible to participate in the viability-scoring process.

Alternative process for projects scoring too low to be included for Option A study

As LSA has proposed before, CAISO should provide an alternative process for those projects to demonstrate worthiness for study.  No scoring or other screening process can capture all aspects of project readiness or value.  Regardless of the criteria used to screen or score IRs, the CAISO IR intake reform should include an “appeals” type option.    

This appeals or (other equivalent) process would give developers a chance to demonstrate (through third party consultant studies or other means) that projects scoring lower or otherwise excluded in the earlier process offer benefits not captured under the screening/scoring framework and, therefore, should be accepted for study.

To facilitate this proposal, the CAISO should consider relaxing the 150% limit to include these projects if they are found worthy of study.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU.

LSA has continued concerns about how LSEs could evaluate projects with little or no cost or timing information, and we agree with others that PPAs or other commitments this early are likely to contain so many off-ramps that they will be of limited value in determining viability. 

In general, LSA does not agree with incorporating LSE interest in ways that supersede project viability measures.  In particular, LSA opposes allowing specific resources in regulator-approved resource plans for non-CPUC jurisdictional LSEs to automatically qualify for study outside the points system, with their capacity subtracted from the available 150% amount in the applicable transmission zones.  LSA agrees with CalCCA and Sonoma Clean Power (SCP) objections at the 9/28 stakeholder meeting to this undue preference and ability to sidestep the viability-assessment scoring process.

The CalCCA and SCP objections were based on the fact that CPUC-jurisdictional LSEs may also have resource plans with specific projects, but LSA objects more generally to allowing such LSE preferences – regardless of the regulatory authority – to overwrite the project viability scoring. 

Appropriate points can be given in the scoring for any project-specific PPA-related progress – or equivalent viability demonstrations, like additional security posting – but that does not justify allowing any projects to bypass the viability-scoring process entirely.

b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements.

LSA does not support the proposed auction feature, because of:

• Lack of stakeholder support for an auction approach:  Nearly all stakeholders opposed an auction approach generally, and LSE does not understand the CAISO’s persistence in promoting it.  LSA agrees that this mechanism – including higher financial-security requirements – may raise certain issues with undue discrimination as well.

• Lack of early information on which to base a bid price.  The information proposed to be provided by the CAISO is not project-specific enough for a developer to determine a rational bid price in advance.

• Lack of rationale:  This is a complicated solution that would likely be rarely used – only for projects in areas with available capacity, only where the complex, multi-factor scoring results in ties between projects that happen to be on the margin for the 150% cut-off.  Instead: (1) a properly designed scoring system should minimize such score ties; and (2) simpler solutions for any ties should be considered, like pro rata study awards (e.g., projects could downsize to match their awards) or allowing the capacity studies to slightly exceed the 150% threshold (e.g., to 153%) where there are tie scores.

The CAISO said at the 9/28 stakeholder meeting that it does not want to use pro rata awards, because it believes that would add additional steps to the process (e.g., downsizing decisions) before studies could begin.  However, this minor additional administrative activity would be far less than needed to hold and track/monitor an auction process.

If an auction approach is retained as a tie-breaker, the CAISO should allow bid submittal later in the process, after the higher-scoring projects accepted for study, and the “tied” projects subject to auction, are identified.  As noted in the 9/28 stakeholder discussions, for example, developers may bid differently if they have only one project subject to the auction process (and its associated higher financial commitments) than if they have multiple projects in this situation.

c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO.

The CAISO should clarify whether the scoring is applicable to Energy Only capacity or projects, inside or outside transmission zones (see below).

Some of the proposed criteria appear to be duplicative, e.g.:

• Both LSE interest and the specific “commercial readiness” criteria reflect LSE interest and can probably be combined.
• The “project attributes” and “project location” definitions both address locational attributes that can probably be combined.

The Site Control/Site Exclusivity verification process could probably be facilitated using standard MW/acre range assumptions for different technologies, with developer ability to demonstrate why land below those ranges are reasonable in specific circumstances.

LSA also suggests that the CAISO clarify any difference between “load pockets” and Local Capacity Areas in its proposals, i.e., whether there is a substantive difference or whether the former is simply use of informal terminology to describe the latter.

Finally, consistent with the above comments concerning “LSE interest,” LSA suggests that the CAISO consider methods for demonstrating readiness unrelated to offtake agreements, i.e., project-specific development measures that are actually in the control of developers.  These measures could include, for example, orders for or procurement of site-specific generating equipment, or other activity tied to the site or project.

i. Please indicate interest in participating in a workgroup to refine scoring criteria.

LSA is interested in participating in this workgroup.

d. Please provide feedback on auction design and use of auction revenues.

Please see above – LSA does not support this approach.

Issues not in the comment template

“Available transmission capacity:”  The Proposal continues the CAISO’s ambiguity about the meaning of the term “available transmission capacity” and how the “150%” figure would be determined – i.e., whether “available transmission capacity” means deliverability capacity or interconnection capacity.  In addition to determination of the 150% limit, this determination impacts how projects would be counted against that limit.  For example:

If that means interconnection capacity, a 1000 MW project at the POI would be counted for this purpose as 1000 MW regardless of composition. 

If that means deliverability capacity, a 1000 MW project at the POI with 100 MW of storage and 900 MW of solar would be counted as about (100 + (10% of 900) =) 190 MW (assuming the proposed SSN elimination). 

In other words, under an “available transmission capacity = deliverability capacity” construct, presumably Energy Only capacity, or Energy Only stand-alone projects, would not count against the 150% limit and need not be subject to the scoring criteria, since they do not require deliverability.  In other words, they could automatically be accepted for study, or at least subject to different viability-score cutoffs than projects/capacity seeking deliverability, and they should not be excluded from study even if they are located outside transmission zones with available deliverability capacity.

Process improvements:  The CAISO should implement earlier PTO proposals to simplify the IR, modeling, and MMA process.  Those were not mentioned in the Proposal.

Specifically, LSA supports: (1) the PG&E and SDG&E proposals for simplified IR packages; and (2) the SCE proposal to use standard models for each technology, instead of detailed project-specific modeling.  Both sets of proposals would defer project-specific details to much later in the interconnection process, until after the point where many projects typically drop out, reducing the burden of the process overall.  While adjustments may need to be made depending on the expected single-study process, LSA still believes that these ideas may have merit and could considerably reduce the time and effort to prepare and assess IRs and later modifications.

Cluster 15 process:  Aside from clarifying their locations with respect to transmission zones (see responses to Q1 above), the CAISO should clarify the following, with respect to Cluster 15 IR requirements to be accepted for study:

• Which Order 2023 provisions will apply to these already-submitted IRs, e.g., Site Control.  This clarification should take place now, and not wait until the CAISO’s December compliance filing, or the November Draft Final Proposal in this initiative, so developers have time for activities such as increased site-control compliance actions.

• How the CAISO would apply its intent (stated at the 9/28 stakeholder meeting) to apply the viability screening criteria before continuing the validation process, given C15 opportunities to modify projects when the process resumes in April-May, and the September 2024 validation deadline.

25% developer limit:  The CAISO should remove the proposed 25% developer limit.  The developer cap is an unvetted proposal, based on a hypothetical concern, that was not discussed in the working groups.   There is no basis for this number, no differentiation between concerns in specific areas and applications spread throughout the system, and no indication that this problem has ever occurred. 

LSA believes that such a restriction would lead to fewer cost-effective projects entering the queue.  Moreover, larger developers may have more resources and experience that can increase the probability of project success.  There are many situations, for example, where smaller developers have begun projects that are later acquired (and completed by) larger developers with greater financial resources, and such acquisitions would be outside the initial limits.

LSA contends that no other ISOs/RTOs have implemented a developer cap.  MISO had proposed such a cap but dropped it on the basis of discriminatory treatment.  LSA also believes that the Option B process – with the additional reforms recommended in these comments – can provide a check on any one developer influencing the process. 

If CAISO concerns can be shown to have merit, the scoring criteria could include an additional category for developer diversity instead of implementing a developer cap.  Any remaining market-power issues are better addressed by LSE regulators in the procurement process.

“Qualified non-LSEs:”  The Proposal says procurement interest from such entities would be considered.  LSA agrees that this concept should be incorporated into the process to the extent that interest from LSEs is considered, but the CAISO should clarify how such entities would be “qualified.”

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

a. Please provide feedback on the modifications to the Option B process.

LSA appreciates the reforms in the Proposal, but more should be done, along the lines of LSA’s original proposals.  For example:

• Projects in transmission zones should be allowed to elect Option B if they do not: (1) Make the viability-scoring “cut;” or (2) receive a TPD allocation.  There should be no problem with developers financing additional transmission into attractive areas. 

• Posted security for Option B upgrades should go to other projects sharing the upgrade, as discussed at the 9/28 stakeholder meeting, upon withdrawal of a project.

• Posted security should be transferred elsewhere if the PTO is not building the Option B upgrade, e.g., to another entity established by Option B projects to facilitate upgrade construction or another entity hired by Option B projects to build the upgrade.

The CAISO’s concerns about “stranding” of transmission capacity approved in the regular TPP process should be addressed through the annual Reassessment process, where unneeded transmission projects should be dropped, as is the case today.

Option B projects should be allowed to negotiate alternative funding, including but not limited to mutually established earlier postings or other financial protections of each other.

Option B projects should be relieved of financial responsibility if the upgrade is later approved in the TPP or other means.

The CAISO should assist with implementing financing of Option B projects, e.g., through:

• MT-CRR revenue estimates, so potential Option B sponsors can better understand the net costs of the upgrades.

• Reimbursement if upgrade sponsors can demonstrate benefits to the system, e.g., deliverability for future projects in that area or reliability improvements.

Study process topic not included in the comment template

C15 Interconnection Study and GIA execution timing:  Details on the studies to be performed, and the process and timing for study and GIA executions, are urgently needed to support project development activities.  These details should be released as soon as possible, but no later than the Draft Final Proposal.

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

a. TPD allocation 

FCDS/PCDS upgrade transparency:  The CAISO should provide much more clarity about upgrades needed for FCDS/PCDS when a project receives TPD awards, and regular updates when things change.  This information should also be provided to projects already holding TPD awards, many of which do not receive it until shortly before their projects are coming on-line, when it is too late to adjust arrangements like PPA deliverability commitments.

Option B and D deliverability-retention demonstrations: As noted in LSA’s workshop presentation, and discussed at length in the workshops, the CAISO needs to address problems with Option B and D retention requirements in the next allocation cycle, before current recipients lose their deliverability due to the large disconnect between retention requirements and upgrade timelines for some projects.  This problem will only worsen in the next TPD Allocation cycle, where some projects receiving TPD awards will not get FCDS/PCDS until required upgrades are done in 2030 or 2032. 

These projects would have the unpalatable choice to either:

• Execute PPAs now, for their current nearer-term CODs, and take a large risk that there may be no Interim Deliverability (so RA deficiency penalties would apply) for many years; or

• Delay their CODs to match the upgrade-construction timeline, but then there may be no chance to get the PPAs needed for TPD retention, since there are no LSE procurement directives or authorizations that far into the future.

The CAISO should either:

• Give projects longer-term Interim Deliverability certainty (see above), so they can execute PPAs to reach their CODs even though upgrades needed for FCDS/PCDS won’t be done until much later (preferred, because the state needs these projects sooner, not later); or

• Delay required PPA showings until the time where LSE procurement would actually occur.

The CAISO seemed to understand this issue in workshop discussions, but it is not addressed in the Proposal.

EO qualification for Option A or B:  The CAISO has not provided reasonable rationale for its proposal to exclude Energy Only projects from qualifying for Options A or B.  For example, if these projects can meet the applicable milestones (e.g., they secure a qualified PPA), LSA sees no reason to exclude them.   

That was the concept behind removing the inferior treatment of EO projects only recently, in the last TPD Allocation process (e.g., combining earlier Groups 1 and 4 into Group A, and combining Groups 2 and 5 into Group B).  These projects have been in the queue longer and may score higher in many viability measures than those just coming off the study process.

There are plenty of situations where projects thought to be dead were acquired by others and resurrected, and given the framework today, that could include EO requests for deliverability.

Moreover, later approvals of additional TPP upgrades or successful Option B projects could provide additional deliverability later, and EO projects should be allowed to request it then.

DFAX scores:  The CAISO earlier proposed to use DFAX scores (impacts of projects in different locations on transmission constraints) in allocating TPD, but that proposal is not mentioned in the Proposal.  This proposal seemed like a sensible way to maximize available transmission capacity – assuming that the locational impacts are transparent – and the CAISO should clarify whether this element is still part of the proposed reform package.

b. Interim Deliverability

The Proposal retains the earlier CAISO commitment to consider multi-year ID, for the period between project COD and upgrade completion for FCDS/PCDS.  LSA strongly supports this idea, in both the Deliverability Assessment Review initiative and this one, because it would help provide contractable assurance of available Interim Deliverability, but more details are needed.

While LSA understands the difficulties of determining Interim Deliverability over a multi-year period, and further in advance, the CAISO needs to find a way to keep project CODs on-track, and to reduce the need for developers to postpone their CODs to avoid risks from long-lead-time upgrades delaying FCDS/PCDS deliverability status. 

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects?

LSA appreciates the CAISO’s consideration of this proposal but continues to believe that it is short-sighted to focus only on upgrades assigned to withdrawing projects.  PTO and ratepayer funding of Network Upgrades will be reduced by elimination of upgrades assigned to later-queued projects, and this element is not considered at all in the proposal. 

The deferral of refunds generally will reduce the incentive for projects to elect this option, so reduction or elimination of this withholding element through consideration of these other benefits would help mitigate that undermining of the associated project-withdrawal incentive. 

b. Are the updates to the Limited Operation Study sufficient?

No, requests should still be allowed more than 9 months in advance.  While LSA appreciates the longer lead time compared to the current 5-month period, given the extremely high benefit from such earlier information, LSA recommends continued consideration of ways to offer a longer timeline of at least 2 years.

c. Comments on adding SGIA asynchronous generating facility requirements

LSA has no comment on this proposal.

d. Comments on removal of suspension rights

LSA continues to oppose this proposal.  As the CAISO has said, few projects use it, but the CAISO has not demonstrated any harm from retaining this option. 

More specifically, this proposal appears to be contrary to FERC direction.  FERC Order No. 2003 allowed generators to suspend work on Interconnection Facilities or Network Upgrades for up to three years for any reason.  FERC has since rejected an Arizona Public Service proposal to remove suspension rights, stating that removal of suspension rights unduly limits the reasons for which an Interconnection Customer may request a suspension (see FERC Notional Order, Order on Tariff Revisions, Arizona Public Service Company, September 29, 2023).  

e. Comments on TPD Transferability proposal

This is an unnecessary and unwise proposal.  LSA continues to strongly oppose proposals to restrict TPD transfers or penalize projects transferring TPD.  Despite initial CAISO “intent,” tradeable deliverability is a process improvement that has enabled capacity to move forward, and it should not be removed so soon after approval (2021) without being given a chance to work.

First, the inter-project TPD allocation process is still very new.  The CAISO said at the Working Group 5 meeting that it had approved seven inter-project TPD transfers, but no other information was provided about the subsequent status of those projects, and no specific concerns about the transfers was identified.  It is far too early to determine the effectiveness of this tool, and the number of transfers hardly seems to be overwhelming the system, especially since the “analysis” required is mainly verification of the transfer amounts that requires only simple math.

Second, as noted at the WG5 meeting, TPD transfers between several projects owned by a developer can help configure the projects to better meet off-taker contracting needs, which improves the viability of the projects involved.  The CAISO seemed to understand this issue at the meeting, but that understanding is not reflected in the Proposal.

Third, projects transferring TPD to other projects would, to that extent, be converted to Energy Only, but there is no reason to force them to withdraw from the queue if they continue to progress and meet viability requirements for other Energy Only projects, e.g.:

• GIA milestone deadlines, which (as noted above) the CAISO is already starting to enforce and proposes in this initiative to increase enforcement; and

• BPM for Generator Management, Section 6.5.2.1 (Time in Queue), where the CAISO decided in the 2021 IPE initiative to increase enforcement of the project viability demonstrations in that provision (applicable to both Energy Only and FCDS/PCDS projects). 

While it may be true that most stand-alone EO projects have not reached COD as of yet, there is no reason for the CAISO to constrain their ability to do so in the future, nor is there support for requiring project downsizing to reflect deliverability transfers from projects staying in the queue.  For solar and wind projects in particular, as their QC and NQC values have declined and will likely continue doing so in the future, deliverability is less a measure of viability and will be even less so going forward, so forcing them to leave the queue is simply not justified. 

Finally, the CPUC’s Preferred System Plans call for significant volumes of Energy Only capacity to achieve GHG reduction targets after reliability targets have been met.  Although much of this capacity may be co-located with energy storage, CAISO should not establish rules that would preclude fulfilment of the CPUC resource plans using stand-alone Energy Only capacity. 

f. Comments on viability criteria and time-in-queue limit

LSA agrees with the overall concept of requiring projects without executed GIAs to execute them on a timely basis, and to provide NTP and make third postings.  However:

• The timing of the process leading to those required GIA execution dates should be added to the proposal, e.g., PTOs must be willing and able to tender draft GIAs in sufficient time for the normal negotiation and approval process to finalize the agreements, and PTO delays in responding to draft turn-arounds should be grounds for extending the execution deadlines.

• The CAISO should allow for timing extensions by agreement of the parties, as is currently the practice with GIA negotiations.  Many times, delays in the negotiation process are not caused by the IC, and the IC should not be penalized for delays by others.

• The CAISO’s recent reforms postponing LGIA execution based on the longest-lead-time upgrades was an improvement and should be retained for Cluster 14 and future projects.  That framework was reasonable, and the reasons for its adoption have not changed

In addition, the CAISO must consider the interaction between this proposal and the current Commercial Viability Criteria.  For example, PTOs may require these projects to submit MMA request to extend their CODs to now-achievable dates in the GIA development process, and many have been in the queue so long that this request could trigger CVC.  However, one CVC requirement for COD extensions with deliverability is an executed GIA, which would be impossible for these projects, since the purpose of this proposal is to get them to execute GIAs. 

The same is true for executed PPAs – also required under the CVC - where CAISO is proposing to remover the option to provide such PPAs one year after the COD extension request (see below), but it’s likely impossible for these projects to have them when the MMAs are submitted.

g. Comments on project Modification updates

LSA is pleased that the Proposal does not adopt earlier proposals to limit the timing or number of MMA requests and thanks the CAISO for being responsive to developer concerns about this issue.  LSA is also encouraged that the CAISO has committed to incorporating technological improvements to streamline the modification process.

However, LSA is disappointed that CAISO did not adopt any expansion of revisions that could be made without MMA requests.  LSA urges the CAISO to continue consideration of adding revisions approved 100% of the time (e.g., inverter changes and gen-tie combinations) to this list.

h. Comments on postings for shared network upgrades

LSA does not oppose this proposal, as long as it is accompanied by adoption of proposal (j) below.  Third postings are not justified unless the PTO is required to move ahead with development of the associated upgrades.

The CAISO should formalize its clarification in the 9/28 meeting discussions that the NTP and third postings required of all projects does not extend to other upgrades not shared with the first project providing NTP for a specific upgrade.  As the CAISO stated, this would require separate NTPs and third-posting dates for the other projects sharing the upgrades that have later schedules for their other upgrades.

i. Comments on timing of incorporating MMAs into the GIA

LSA supports this proposal as long as NRIP qualifying criteria are revised to accept MMA approvals in lieu of updated GIAs.

j. Comments on timing on starting network upgrades

LSA supports this proposal, since an NTP from the IC is meaningless if the PTO does not then proceed.  In particular, the PTO does not need the third security posting if it is not proceeding with upgrade construction (or Construction Activities, as they are defined in the tariff).   LSA believes that the PTO could be considered in breach of the GIA if it does not proceed to construct needed upgrades if the IC has fulfilled all its obligations in this respect.

Topics not in the template

CVC modification:  LSA does not agree with removing the one-year PPA compliance provision, as the CAISO has not justified this proposal.  This is a particular problem for the CAISO’s proposal to require GIA execution on a set timeline for projects long in the queue without an executed GIA, since (as explained above) they will likely need to request COD extensions to facilitate GIA execution, but it will be virtually impossible for them to gain the required MMA approvals without this CVC PPA requirement deferral.

Construction Sequencing:  The Proposal would delay Construction Sequencing (CS) request timing until a project has started construction and is within 6 months of its GIA In-Service Date.  LSA does not oppose formalizing the current practice of delaying a CS request until a project has started construction, but the requirement to wait until 6 months before the ISD is not justified and would likely be counter-productive. 

• Projects seeking to accelerate their CODs, and the PTOs constructing their upgrades, need to know further in advance than 6 months before ISD.

• Likewise, it is to the benefit of both the PTO and the IC to know more than 6 months in advance (actually, less once the processing timing is considered) that the project COD will be delayed, for work-scheduling, financing, and other purposes.

A compromise position might be to allow CS requests for COD extensions to be allowed as early as 12 months before the current In-Service Date, and not to place limits on CS requests for COD accelerations. 

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

MRP finds the proposal to evaluate interconnection requests on a zonal basis to be reasonable.  The success of this proposal will hinge on several factors, including: (1) the CAISO’s ability to precisely define and communicate the boundaries of each area; (2) the CAISO’s ability to communicate all the information needed for developers to make informed decisions about potential projects at least twelve (12) months in advance of the opening of the window to submit interconnection requests. 

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

(a) Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU.  MRP respectfully urges the CAISO to carefully consider incorporating LSE interests and commercial activities into the reformed interconnection process in a way that does not undermine open and non-discriminatory access principles.  Additionally, considering LSE interests should not and cannot undermine competition for wholesale generation or favor utility self-build or ownership interests.  Ultimately, MRP believes that the CAISO and stakeholders will have to carefully consider just how much weight to give LSE interest among all the other proposed scoring criteria to carefully balance this consideration with all other considerations.

With regards to a related concern – whether the CAISO’s interconnection process should favor any particular generation technology – MRP also respectfully urges the CAISO to reform its interconnection process in ways that does not favor or disfavor any particular generation technology.   The CAISO’s FERC-jurisdictional interconnection process must abide by the bedrock principle of non-discriminatory network access and should not “put a thumb on the scale” to favor any particular generation technology. 

(b)  Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements.  While MRP appreciates the CAISO’s willingness to “think outside the box”, MRP has concerns about the auction process.  Given that the CAISO has proposed that the auction would only be used in situations in which (1) projects’ viability scores are identical[1] and (2) the projects cause the total MW for a zone to cross the capacity limit for that zone,[2] it’s not clear to MRP that this situation would happen frequently enough to warrant designing and implementing an auction solely for the purpose of breaking ties to get to 150% of available capacity.  The example set forth by the CAISO on page 30 of the Straw Proposal has only seven projects and only three distinct viability scores; while admittedly this is just an example, recent experience suggests there would be many more projects and likely many different viability scores (assuming the proper design of the scoring criteria) would be submitted.  It’s also unclear to MRP how interconnection customers would decide how much they want to bid to advance a project into the study process, given that there would be no clear line of sight into the chances of or costs likely to be incurred for getting deliverability for that project at the time the interconnection request was submitted.  For all these reasons, MRP respectfully urges the CAISO to not invest a huge effort into designing the auction process. 

(c)  Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO.  MRP respectfully urges the CAISO to develop scoring criteria that eliminate as much subjectivity as possible by defining those criteria and more granular binary criteria that are either satisfied or aren’t satisfied.   In other words, if a project needed to do activities A, B, and C, the project should receive a score of “X” points if it commenced activity A, a score of “Y” points if it completed activity A, etc.  In addition to being more granular, the criteria should very precisely define what activity must be done to satisfy them.  Finally, the CAISO must clearly and precisely set forth what documentation is required to be submitted to support the scoring.

With regards to specific proposed criteria:

• Indication of community support.  Though the CAISO has offered that this criterion would be worth a relatively modest five points (out of a potential maximum of 240), MRP is concerned about how community “support” would be conveyed.   MRP can easily imagine a situation in which one group of potentially affected parties might support a project, while another group of potentially affected parties would oppose it.  In that case, what “community support” score would a project receive?   Given the relatively low weight proposed, and the complication involved in accurately scoring this criterion, MRP suggests it be removed. 
• Application land use permit. MRP suggests making this requirement the “pre-application” submittal that is filed with the authority having jurisdiction (“AHJ”) to initiate preliminary discussions on the proposed project prior to the official “application” is filed, as the application triggers a clock with the AHJ and the project may look different after the cluster process concludes.  
• Conditional Use Permit [CUP] granted.  MRP has two concerns with this criterion.  First, getting such a permit takes a long time, and so it seems unlikely that a project will have this permit at the time the interconnection request is submitted.  Second, if a project has obtained the CUP at the time the interconnection request is submitted, the project developer will likely have to seek extensions of that CUP to accommodate the time that it takes for a project to go through the CAISO’s interconnection process, which could be burdensome for the developer and annoying for the entity grating the CUP. 
• Project Location.  MRP offers that this criterion may not be required, as project fundamentals (i.e., off-taker interests and land value), along with other aspects of the CAISO’s proposal (e.g., the proposal that any interconnection request outside of a targeted “zone” where available interconnection capacity has already been identified will have to proceed as an “Option B” project where the developer must fund the necessary network upgrades without reimbursement[1]) will, of their own accord, encourage developers to locate their projects in preferred locations. 
• Projects that do not require permits, have permit waivers, or do not require NEPA/CEQA review.  In response to the CAISO’s response for feedback on this topic,[2] MRP offers these thoughts.  First, consistent with MRP’s recommendation that the CAISO adopt binary, granular scoring criteria, the criteria could be: if a project requires a certain permit, a project would get a small score for having submitted the application and a much larger score if the required permit had been obtained or was not required.   With regards to the CAISO’s confession that it does not employ permitting experts and can only use straightforward and verifiable permitting criteria, given the importance of permits to a project’s viability, MRP respectfully urges the CAISO to consider hiring a permitting expert.  If the CAISO wants “verifiable” scoring criteria, such an expert’s advice may be essential in determining whether a project requires a certain permit or not, otherwise the CAISO is relying on the interconnection customer’s representation with regards to permits. 
• Project land requirements.  MRP encourages the CAISO to ensure that sufficient land has been secured for the project – either by establishing minimum pro forma “acres per MW” requirements, or by requiring that an independent engineer submit an affidavit explaining how the project has secured sufficient land if the minimum land requirements have not been met.

i. Please indicate interest in participating in a workgroup to refine scoring criteria.   MRP would be interested in participating in that working group.

(d)   Please provide feedback on auction design and use of auction revenues.  The CAISO has proposed that projects that successfully compete in an auction would be refunded their auction security upon project completion.  If that project withdraws, the auction security would be used to offset the cost of needed network upgrades.[1]     While this seems reasonable, MRP notes that, while the CAISO offers that the prospects for forfeiting auction security should discourage less viable projects, MRP offers that having auction security at risk until completion of a project may also serve to increase the incentive for projects to remain in the queue after they become non-viable. 

[1] Straw Proposal at page 30.

[1] Straw Proposal at page 27.

[2] Straw Proposal at page 25.

[1] MRP strongly agrees with the CAISO’s observation underscoring the need for clear and verifiable scoring criteria (Straw Proposal at page 29).

[2] Straw Proposal at page 29.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

The CAISO has proposed that any project seeking to interconnect outside of the identified interconnection zones would be required to pay for all network upgrades without cash reimbursement and would also still be subject to a minimum project viability score.  MRP finds this proposal reasonable but believes that developing a precise minimum viability score for Option B projects to proceed may be difficult and contentious. 

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

(a) TPD Allocation.  The Straw Proposal indicates that, while market participants urged the CAISO to refine the Transmission Plan Deliverability (“TPD”) allocation process, the CAISO would like to finalize details regarding the proposed IR scoring criteria and study process before making significant changes to the TPD allocation process.[1]  Given how important deliverability is to new generator projects, MRP respectfully urges the CAISO to consider the TPD allocation process together with changes to the interconnection process.  Creating an efficient and effective interconnection process is of little benefit to projects if it is not known that there is little chance of obtaining deliverability early in the process.  Ideally, the CAISO’s interconnection process should provide a reasonably reliable view of the prospects for obtaining deliverability as early as possible.  

(b)  Interim Deliverability.  MRP supports this aspect of the proposal.

[1] Straw Proposal at page 38.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects?
Yes, MRP supports this aspect of the proposal.

b. Are the updates to the Limited Operation Study sufficient?
Yes, MRP supports this aspect of the proposal.

c. Comments on adding asynchronous generating facility requirements in the SGIA.
MRP supports this aspect of the proposal.

d. Comments on removal of suspension rights
MRP supports this aspect of the proposal.

e. Comments on TPD Transferability proposal
MRP is concerned about the proposed limitations to transferring deliverability.  MRP believes that, in the case of co-located projects, the developer should be able to transfer deliverability between resources with a common point of interconnection with no limitations or requirements to downsize a project. 

f. Comments on viability criteria and time-in-queue limit
MRP supports time-in-queue limits as long as it is clear that where a project’s timeline extends due to things outside of the interconnection customer’s control that are directly related to its interconnection with the transmission system (i.e., delays in the construction of network upgrades or PTO’s interconnection facilities or CAISO-imposed delays) the time-in-queue limits would be extended day-for-day.

g. Comments on project Modification updates
MRP supports this aspect of the proposal, which reflects the reality that the MMA cannot proceed until the CAISO completes the necessary work anyway, and the proposed timelines better reflect how long it takes for the CAISO and the PTOs to complete this work.  MRP respectfully requests the CAISO consider and offer ideas that will better allow and encourage the CAISO and PTOs to abide by the timelines set forth in the CAISO’s governing documents. 

h. Comments on postings for shared network upgrades. 
While MRP supports the CAISO’s proposal (that all customers sharing the network upgrades must make their postings when the upgrade is ready to proceed), MRP requests that the CAISO set forth what happens if an interconnection customer does not make their posting at that time. 

i. Comments on timing of incorporating MMAs into the GIA.
The CAISO proposes that GIA amendments should wait until close to the time the project is set to synchronize.[1]   While MRP understands the CAISO’s intent behind this proposal, MRP notes that an executed modified GIA may be key to securing project financing, and so may not be able to wait until close to synchronization. 

j. Comments on timing on starting network upgrades
MRP supports this aspect of the proposal.

[1] Straw Proposal at page 59. 

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

n/a

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

Please refer to the attached rubric with redlines that reflect our recommended changes.

2a. Feedback on interest from an offtaker and commercial readiness criteria

Between these two categories, there are four ways to earn points based on non-binding agreements made with an offtaker or LSE. Criteria that are easily achievable and not indicative of project viability this early in the process (e.g., executed term sheet for a PPA) should be removed.

We do not think it is reasonable for an offtaker to indicate preference for a project at this stage, or for a supplier to lock in a PPA that is predictive of economic viability. Projects do not know their interconnection facilities and network upgrades costs and will not have procured equipment nor locked in financing this far ahead of NTP and deliverability allocation. Because it is impossible to set reliable prices for offtakers before these costs are known, any offtaker interest will be very high level.

Relatedly, any contract that is signed will necessarily have a huge amount of flexibility for the supplier (i.e., exit clauses), and will not be indicative of project viability. Insofar as a price is locked in at this stage, it will almost certainly be the wrong price – if it is over what is needed for project viability at the time of NTP, this will come at the expense of the consumer; if under, the project will find a way to exit its offtake agreement. We therefore recommend eliminating criteria based on offtaker interest and having a signed PPA, which have no bearing on project viability at the time of intake.

We support prioritizing projects that meet the attributes specified under current procurement plans but believe that this criterion is captured in the Project Attributes section. Therefore, we recommend removing this criterion in this section.

2b. Feedback on applicability and use of criteria

Scoring criteria should only be applied to projects under Option A as our view is that projects under Option B should be moved forward no matter what. Scoring criteria can be helpfully used for intake of Option A projects to increase efficiency in the study process. However, CAISO can only surmise so much about a project at the time of intake and should maintain a healthy humility and avoid overly engineered and administrative project selection that could otherwise undermine competitive market dynamics.

2c. Feedback on other scoring criteria categories

We support CAISO’s intention to manage the high volume of interconnection requests through scoring, but caution against using criteria that do not measure viability, which introduce risks that scoring will not be accurate and could lead to false precision, create opportunities for gaming, and, ultimately, not result in the intake of the most viable set of resources.

Permitting status

We support a category that scores projects based on their likelihood of success in securing permits required for development, which we agree is predictive of project viability (i.e., project attrition risk). We suggest several changes to the criteria in the current proposal.

We agree that a criterion for community support is justified as an indicator of which projects will have success with local permitting. Additionally, early outreach is likely best practice in community engagement and enablement. We look forward to working with CAISO on how to measure this factor.

It is expensive and time-consuming to submit a fully completed application for a land use permit or for the CEQA environmental review. It is extremely uncommon to put so much cost at risk at this stage of the development process. As such, we would expect many Interconnection Customers (“IC”) to merely “check the box” on this criterion by submitting incomplete applications, which is not a meaningful indication of viability. Furthermore, the agencies responsible for receiving and processing these applications are already backlogged, and any superfluous workload would needlessly exacerbate existing delays. Because we think it would be difficult to verify that applications for land use permits or CEQA review are actually complete, and we are concerned that moving the top of the project funnel to CEQA review would just change the venue where project delays occurs, and we recommend eliminating these criteria.

If a project has applied for and been granted a CUP, we believe it is appropriate for this project to receive points. Not every property will require a CUP. If a project is sited in a zone where it is deemed an appropriate use, then that project should also be awarded points. In order to prevent gaming, there should be guardrails in place to prevent changes to this project later in the interconnection process that would then require a CUP.

We believe that it may be reasonable to score projects based on specific attributes of their chosen site. The CEC land use screens may be appropriate to use as indicators of site attributes. For instance, it might be appropriate to award points to projects that are sited outside of parcels marked as “critical habitat” if they are more likely to have success at attaining permits. CAISO should work with the CEC to assess whether the CEC land use screens are appropriate for this use.

In many instances, land use screens are overly conservative. For instance, critical habitat screens simply identify the potential for critical habitat. Developers use onsite land surveys to verify whether a site is appropriate for development. In instances where a project is sited in a parcel marked as “critical habitat,” but where an onsite survey can confirm that the site poses no threat to biodiversity or critical habitat or presents a set of proven mitigation measures, these projects should also receive points.

We recommend introducing similar criteria for cultural impacts and wetlands impacts permits as well.

Project attributes

It is reasonable to prioritize projects that can provide attributes that procurement orders are seeking. We recommend eliminating the first criterion because we feel it is adequately captured by the second.

Project location

MN8 assumes that CAISO includes a criterion for projects located in energy communities because the tax credit bonuses improve the economics of these projects. While this may be true, a project’s eligibility for tax credit bonuses is one of countless attributes of a project that would affect its economic viability. We feel that it is inappropriate for CAISO to favor projects based on only a partial assessment of economics and would again emphasize that commercial viability cannot be known this far in advance of NTP and would encourage CAISO to abstain from pre-empting competition through undue administrative selection. Therefore, we recommend removing this criterion.

We feel that the second criterion in this section is irrelevant at this point in the process. Under CAISO’s straw proposal, projects would only qualify for Option A if they are located in transmission zones with “available capacity,” so it’s not clear how any of them could require ADNUs. We therefore ask that the CAISO either remove it as a criterion or explain how it would function.

Expansion on an operational facility

We think that new projects co-locating with operational projects reasonably indicates that it is likely that the new project will get permits and have strong site control. We recommend removing the criterion here, with the understanding that any of the valuable elements of co-locating with operational facilities will be captured elsewhere, particularly in the permitting and site control screens.

Projects that are siting at the same point of interconnection that are not seeking to increase the capability of the existing gen-tie should not be given any additional priority. This is not a sign of project viability, and while such projects may have slightly better economics, all else equal, we would again urge CAISO to refrain from any partial economic screening.

Site control

We agree with CAISO’s proposal to not include additional site control criteria as minimum requirements beyond the requirements set by FERC Order 2023. However, we think that it is appropriate to award points to projects that have exceeded the FERC requirements for demonstration of 100% site control at the generation facility and site control at gen-tie, because such cases do entail less project attrition risk.

2.c.i.

We are willing to participate in the working group for developing the scoring criteria.

2d. Feedback on auction design

The scoring system has the adverse potential to replace market forces with administrative project selection. Due to uncertainty inherent in the development process, it will be extremely difficult to predict viability so long in advance of project Notice to Proceed (“NTP”) timelines. Therefore, we urge CAISO to increase the total amount of capacity it will accept for study and then allow for any necessary further screening to occur at the time of the Transmission Plan Deliverability (“TPD”) Allocation.

The cap that CAISO is proposing to apply at intake on the total capacity of projects that can be studied of 150% of the available and planned transmission capacity in each zone is too small. This cap would lead to a situation whereby almost all of the projects that ultimately were able to interconnect and receive deliverability through the TPD Allocation were those that were selected at the intake step, especially in instances where some of the accepted projects dropped out before that time, which will be common.

At the time when intake occurs, the viability of a project is extremely uncertain: key cost components and offtake are both largely unknown, and what is estimated can change materially between this time and NTP, making project economics unsure, and while elements of project attrition risk can be screened for, there is uncertainty here as well.  There is no way to be sure of project economics at this phase, given this would require locking in costs and revenues, which will not be done this far in advance with lingering attrition threats; and it would be similarly inefficient to totally de-risk projects of all attrition threats this far in advance given the material costs of doing so (e.g., CUPs cost millions of dollars and take multiple years to execute).

While it is reasonable to prioritize more viable projects for study, given the inevitable uncertainty at the time of project intake, we recommend that CAISO broaden the amount of capacity that is studied so as to avoid premature, erroneous administrative project selection decisions and allow for more market-based selection, with the understanding that more precise prioritization can occur during TPD Allocation when projects are much closer to NTP and commercial readiness and other factors are more knowable.

CAISO’s proposed cap also risks selecting less capacity than is needed to use the available headroom. Assuming capacity totaling 100% of zonal headroom can interconnect, then this implies a capacity-weighted attrition rate of 33%. According to a 2023 Lawrence Berkeley Lab report, CAISO has a capacity-weighted attrition rate of 92% ("Queued Up," April 2023). While it is reasonable to expect that the Order 2023 and IPE reforms will improve the attrition rate vis-à-vis historical levels, the implied level of assumed improvement by a 150% cap is unduly high.

To ensure the continuance of a competitive market and the progression of enough projects through the queue to utilize existing system capacity, we propose raising the cap to at least 250% of transmission capacity. In the event of a tie at the intake margin, all projects should be studied. An auction would be difficult and expensive to administer, diverting time and resources away from the essential functions of the CAISO. It would also extend the study cycle, since projects would need a long time to develop bids, which is a non-trivial exercise, and the bid price from a particular developer could depend on the number of projects requiring this higher financial commitment, which cannot be known in advance under the CAISO proposal. Additionally, we are skeptical that an auction is aligned with market efficiency principles. An auction will preclude companies that are unable to bear the carrying costs from participating. This will limit supply and reduce competition, leading to higher prices in the long run.

It might be reasonable to create a target of as close to 250% as possible coupled with a minimum threshold of 200%, under which CAISO would never go unless there were insufficient applications. If all resources at a particular score were “in” at 225%, and allowing the next tranche resulted in 500% intake, intake would be cut off at 225%. If these numbers were 175% and 500%, respectively, intake would be cut off at 500%, since 175% would not clear the minimum threshold.

CAISO should clarify how it intends to quantify zonal transmission capacity, and relatedly, how project contributions towards this metric will be counted. We look forward to contributing to this discussion.

CAISO should remove the cap limiting a single developer to 25% of available transmission headroom at intake. Project viability should be enforced through other criteria and market power should be mitigated during procurement and/or wholesale market participation, not interconnection.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

n/a

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

If the total volume of project capacity seeking interconnection through Option A exceeds available headroom at the end of the study phase, then it would be more appropriate to pare this volume down during TPD Allocation. CAISO should revisit the prioritization framework used during TPD Allocation upon completion of the IPE to ensure consistency and best practice. However, that is not to say that this scoring should be mirrored – while it is inappropriate to emphasize certain aspects of project readiness at queue intake, it may be more appropriate to score projects on these same aspects (e.g., commercial readiness) further along in the interconnection process.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

d. Comments on removal of suspension rights

We encourage CAISO to retain suspension rights for projects for now as they remain an important tool to help companies manage unforeseen delays in development. It is our expectation that the Order 2023 compliance and IPE reforms will significantly address the concerns around time-in-queue and delayed interconnection. If CAISO feels that projects exercising suspension rights are still a meaningful driver of delays after these reforms have gone into effect, we think it would be appropriate for CAISO to revisit this issue at such time.

f. Comments on viability criteria and time-in-queue limit

In the case where a project is materially impacted from an action taken by a developer in front of them (e.g., the project drops out), the maximum time-in-queue requirements for the specific timeline affected (i.e., 23 months from study completion to GIA, or 12 months from GIA to NTP and final security posting) should be reset.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

New Leaf Energy, Inc. (“NLE”) appreciates the CAISO’s continued work on the complex issues in this initiative and the thoughtful Straw Proposal. NLE applauds the CAISO’s and stakeholders’ progress in the working group process, while also recognizing the remaining work and tight timeline ahead.

            a) Time-sensitive need for data on the electrical boundaries of zones—especially for Cluster 15 projects

Regarding data to enable the zonal approach to interconnection, NLE respectfully urges the CAISO to release clear information on the electrical boundaries of the zones, the capacity available in each zone, and any constraints within the zones. Ideally, developers would receive this information at least a year before a cluster window opens in order to provide sufficient lead time for land prospecting—particularly with the new site control requirements in Federal Energy Regulatory Commission (“FERC”) Order 2023 for interconnection request submittals.

For Cluster 15 projects, the CAISO should determine which projects are inside and which are outside the zones. The CAISO should convey this information to developers as soon as feasible to allow developers to make prudent business decisions regarding Cluster 15 projects (e.g., whether to apply for permits for projects within zones, whether to withdraw projects outside of zones, etc.).

            b) Definition and calculation of “available capacity”

Further, NLE seeks clarification from the CAISO regarding the definition of “available capacity.” This term seems to refer to available deliverable capacity, but it would be useful for the CAISO to explain the available capacity calculation in future iterations of the Straw Proposal.

The available capacity figures published before a cluster window opens will likely provide only rough estimates because the actual amount of available capacity will depend on project-specific considerations. For example, projects proposing to interconnect in locations with lower distribution factor (“DFAX”) values have less of an impact on the grid from a reliability perspective than projects in locations with higher DFAX values. If the CAISO prioritizes studying projects with lower DFAX values, this could result in a higher volume of megawatts (“MWs”) entering the cluster study because these projects would take up less of the deliverability headroom within a zone—while selecting projects with higher DFAX values would result in a lower volume of MWs advancing to the cluster study.

After the CAISO applies the scoring criteria and selects the portfolio of projects to study, it should take project-specific considerations into account and calculate a more accurate available capacity figure. The CAISO should use this more accurate figure when determining which projects qualify for study under the proposed 150 percent available capacity threshold.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

a) Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU.

NLE is concerned with the CAISO’s proposal related to load-serving entities (“LSEs”) that are not within the jurisdiction of the California Public Utilities Commission (“CPUC”). The CAISO proposes that projects identified as preferred resources in non-CPUC jurisdictional LSEs’ resource plans would bypass the scoring evaluation and automatically proceed to the study phase—leaving less study capacity for other projects, even those with high scores. The CAISO should evaluate all projects under the same scoring criteria so as not to disadvantage other projects in the queue.

b) Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements.

NLE does not have any comments on this item.

c) Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO.

NLE applauds the CAISO for its consideration of the Local Resource Adequacy (“RA”) scoring criterion proposal. NLE’s comments below first address this proposal and then provide feedback on other scoring criteria. NLE is interested in participating in the CAISO’s proposed workgroup that would refine the proposed scoring criteria. This continued stakeholder process is necessary to resolve lingering issues and keep the initiative on schedule.

1) Local RA criterion

NLE is pleased to see that the Straw Proposal included a Local RA scoring criterion within the “project attributes” category. However, NLE is concerned that the proposal is overly restrictive. The CAISO proposes to award 20 of a possible 240 points to projects with an “[a]bility to provide Local [RA in a Local Capacity Reliability Area (“LCRA”)] with an ISO demonstrated need for additional capacity in that local area.”^[1]

NLE encourages the CAISO to remove the unnecessary constraint and expand eligibility to all Local RA resources by modifying the criterion as drafted in the Straw Proposal as follows:[2]

Ability to provide Local Resource Adequacy (RA) in an LCRA with an ISO demonstrated need for additional capacity in that local area (20).

As explained in detail in the sections below, the additional qualification placed on LCRAs is counterproductive. By only awarding points to projects in certain LCRAs, the CAISO risks overly restricting the criterion and limiting its value. Moreover, this limitation suggests that the CAISO believes additional capacity is unnecessary in other LCRAs. To the contrary, Local RA price data, LSE Local RA procurement challenges, and the high proportion of Local RA that is served by thermal generation suggest that new Local RA resources are needed in all LCRAs.

A) Thermal generation in LCRAs

According to the CPUC, 69 percent of the contracted Local RA capacity in 2019 was comprised of natural gas.^[3] A great proportion of this thermal generation will have to retire in the years ahead—beyond the known retirements that are incorporated into today’s Local Capacity Technical Studies—if California is to meet its greenhouse gas reduction goals.

Just because an LCRA has sufficient thermal generation does not mean that there is no need for new resources in those LCRAs in the medium and long term. In fact, quite the opposite is true. For example, in the LA Basin LCRA, 84 percent of its 2019 Local RA capacity was served by natural gas,^[4] yet the CAISO’s concurrent Local Capacity Technical Study found no deficiency in that LCRA.^[5] There is little chance that California can meet its climate goals—let alone lower air pollution and provide relief to environmental justice communities—without a meaningful change in the Local RA resource mix.

Further, a recent Administrative Law Judge Ruling in the CPUC’s Integrated Resource Planning (“IRP”) proceeding recommends that the CAISO analyze a high gas retirement sensitivity, which represents retirement of almost 16,000 MW of existing natural gas generation.^[6] The CAISO should begin planning for the generation needed to replace these resources in LCRAs immediately.

B) Local RA prices

According to the CPUC, in 2021, “[p]rices for the LA Basin, Big Creek-Ventura, San Diego-IV, and the Greater Bay Area—which collectively account for most local RA requirements and contracted capacity—have closely tracked CAISO system prices. RA in Fresno, Humboldt, Kern, Sierra, and Stockton have commanded a larger premium when compared to CAISO system prices.”^[7] This analysis suggests that there is not a correlation between whether an LCRA has a CAISO-demonstrated need and how high a premium LSEs—and thus ratepayers—will have to pay for resources in a given LCRA. By allowing resources in any LCRA to receive points under the criterion, the CAISO would create a pathway to increase the pool of resources competing for Local RA contracts, thus reducing the market power of existing resources in all LCRAs, including those without deficiencies but with particularly high prices.

C) LSEs’ inability to sufficiently procure Local RA

Recent LSE procurement activities indicate a need for a broader pool of Local RA resources located within more LCRAs than those with documented deficiencies. The Pacific Gas & Electric Company (“PG&E”) Central Procurement Entity recently reported that, upon completion of its final Request for Offers to procure Local RA for 2024, it will have a net short position next year ranging from over 2,500 to over 4,200 MW, depending on the month.^[8] Additionally, in 2022, San Diego Community Power sought a waiver for its 2023 Local RA procurement obligation in the San Diego-Imperial Valley.^[9]

According to its August 15, 2023 Interconnection Process Enhancements (“IPE”) comments, San Diego Gas & Electric (“SDG&E”) strongly supports prioritizing Local RA resources in the scoring rubric, as it would “enhance[] reliability where load growth occurs.”^[10] As currently drafted, however, the criterion would not benefit SDG&E—nor Southern California Edison Company—as the only currently deficient LCRAs are in PG&E’s service territory.

D) Avoiding additional transmission spending

In order to address the need for more Local RA capacity while maintaining reliability, either new Local RA resources must come online or new transmission investments are required. With so many transmission investments needed in the coming years for other policy- and economic-driven reasons, NLE suggests that supporting the commercialization of new Local RA resources through the scoring criteria may help avoid additional transmission spending.

E) Sunset trigger

NLE understands that the CAISO may be reticent to send an unending signal to the market to develop new Local RA resources, as it is possible that in the future, the need for such resources may no longer exist. Therefore, NLE proposes that the workgroup consider how to define a sunset trigger for this criterion.

2) Location in load pockets criterion

Relatedly, the Straw Proposal would allocate 20 of a possible 240 points to projects located “in load pockets not needing Area Delivery Network Upgrades (ADNUs).”^[11] NLE strongly supports the allocation of points to projects cited near load for the reasons discussed above and because it is likely that much of the electrification-related load growth will occur in load pockets. It therefore is reasonable for the CAISO to encourage new resource development in those areas. However, NLE seeks clarity from the CAISO on three elements of this proposal.

First, the next iteration of the Straw Proposal should provide a definition for “load pockets.” Second, it is not clear how developers would know whether their projects need ADNUs before the study process commences. NLE seeks clarification on how and when the CAISO will provide information on which load pockets do not need ADNUs.

Third, NLE suggests that this criterion could be enhanced by allocating more points to projects in load pockets that have the least impact on the available capacity in a zone—assuming that available capacity means deliverable capacity. This would ensure the most efficient utilization of available headroom. Incorporating DFAX into the scoring criteria should be relatively easy to implement because the analysis can rely on data already required by FERC Order 2023. Specifically, prior to the cluster window opening, the Order requires release of a heatmap that includes DFAX values, among other items.[12] A project could be eligible for a greater number of points if it has a lower DFAX value for the available headroom. Similarly, a project would be eligible for a lower number of points if it has a higher DFAX value for the available headroom. This would allow the CAISO to: 1) select projects that utilize less available capacity relative to other projects in a given study zone, 2) increase the volume of MWs that can participate in the RA program without transmission system upgrades, and 3) maximize the RA benefit from newly approved upgrades. NLE looks forward to discussing and refining this proposal further in the proposed workgroup.

3) Permitting category

NLE is concerned with the scoring criteria in the “permitting status” category. Progress on permitting appears to provide a reasonable metric to evaluate whether to study a project. However, due to the different types of permits required for projects depending on location, it is difficult to provide an apples-to-apples comparison of permitting progress under the various permitting regimes. NLE looks forward to participating in the workgroup to discuss this issue and refine the scoring criteria related to permitting.

4) Commercial readiness category

NLE is concerned with the scoring criteria in the “commercial readiness” category. Interconnection cost and timing information provided during the study process is a significant—if not the primary—determinant of project viability, and little to no interconnection cost or timing information is available prior to interconnection request submission. If adopted, the criteria in this category would require offtakers to make procurement decisions without information needed to assess a project’s value, timeline, and viability. This would likely result in the CAISO studying less cost-effective projects, as well as a more onerous procurement processes for offtakers—due to the increased risk of developers renegotiating Power Purchase Agreements after the study process provides better visibility into interconnection costs.

The CAISO should therefore eliminate this scoring criteria category. At the very least, the CAISO should reduce the amount of points available to projects under this category. The proposal to provide 50 of a possible 240 points places too much weight on low-value scoring criteria.

d) Please provide feedback on auction design and use of auction revenues.

NLE does not have any comments on this item.

e) Feedback on proposal to limit developer interconnection request submissions

NLE cautions the CAISO against adopting the proposal to limit developer interconnection requests in each cluster window to 25 percent of the available transmission capacity. This anti-competitive restriction would likely limit a number of more cost-effective projects from entering the queue. The proposal could therefore raise ratepayer costs—having the exact opposite of its intended effect.

^[1] Straw Proposal at 25.

[2] Id.

^[3] CPUC, The State of the Resource Adequacy Market—Revised at 7, Table 4 (Jan. 13, 2020), available at: https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/resource-adequacy-homepage/ra_market-report_revised-final.pdf (see Table 4: 16,146 MW of natural gas divided by 23,471 MW of total resources shown in all LSEs’ 2019 month ahead Local RA plans = 69 percent). As far as NLE is aware, updated data have not been published since the January 2020 report referenced here.

^[4] Id. at 10 (6,376 MW of natural gas divided by 7,580 MW of total resources shown in the 2019 month ahead Local RA plan for San Diego-Imperial Valley LCRA = 84 percent).

^[5] CAISO, 2019 Local Capacity Technical Analysis: Final Report and Study Results at 2 (May 15, 2018), available at: http://www.caiso.com/documents/final2019localcapacitytechnicalreport.pdf.

^[6] CPUC, Administrative Law Judge’s Ruling Seeking Comment on Proposed 2023 Preferred System Plan and Transmission Planning Process Portfolios at 26, Rulemaking 20-05-003 (Oct. 5, 2023), available at: https://docs.cpuc.ca.gov/SearchRes.aspx?docformat=ALL&docid=520522241.

^[7] CPUC, 2021 Resource Adequacy Report (Mar. 2023), available at https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/resource-adequacy-homepage/2021_ra_report.pdf.

^[8] PG&E, Advice Letter 7027-E: Pacific Gas and Electric Company (“PG&E”) Central Procurement Entity (“CPE”) 2023 Annual Compliance Report at 75 & Attachment 2 (Sept.19, 2023), available at: https://www.pge.com/tariffs/assets/pdf/adviceletter/ELEC_7027-E.pdf.

^[9] See, e.g., San Diego Community Power, Advice Letter 11-E (Oct. 31, 2022), available at: https://sdcommunitypower.org/wp-content/uploads/2023/01/PUBLIC-SDCP-2023-RA-Waiver.pdf.

^[10] SDG&E, Comments on IPE Track 2 Working Groups (Aug. 15, 2023), available at: https://stakeholdercenter.caiso.com/Comments/AllComments/1198f707-8b68-4560-bb9a-7dd64ea2b57d#org-42e77676-aa33-4068-825b-c23b2aeb3617.

^[11] Straw Proposal at 25.

[12] FERC Order 2023 at paragraph 135, Improvements to Generator Interconnection Procedures and Agreements, Docket No. RM22-14-000 (July 28, 2023), available at: https://elibrary.ferc.gov/eLibrary/filelist?accession_num=20230728-3060.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

a) Please provide feedback on the modifications to the Option B process

NLE generally supports the CAISO’s proposed modifications to the Option B process. However, NLE presents the following additional modifications that would make Option B a more attractive and useful study option:

• If an Option B project withdraws from the queue, the project’s posted security for shared upgrades should transfer to the other projects sharing the upgrades, rather than to ratepayers. Developers’ primary concern with shared ADNUs is that upgrade costs from projects that drop out of the queue shift to the projects remaining in the queue, and this proposal would alleviate that concern.
• If an Option B project has contracted with a non-Participating Transmission Owner (“PTO”) to construct an Option B upgrade, the posted security should transfer to that other entity.
• Option B projects should have the ability to negotiate alternative funding (e.g., earlier financial security postings or other financial protections) to protect against projects with shared upgrades later withdrawing.
• Option B projects should be relieved of financial responsibility for ADNUs that later receive approval in the Transmission Planning Process (“TPP”) or other related processes.
• An ADNU for an Option B project should be reimbursable to the extent that the developer can demonstrate grid benefits (e.g., creates additional deliverability for other projects or improves reliability).

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

a) TPD allocation

1) Consideration of proposals related to TPD allocation

The Straw Proposal delays further discussion of proposals related to the TPD allocation process to a later point in the stakeholder initiative. The CAISO states its intent to convene stakeholder discussions on this topic after finalizing the scoring criteria and other details of the zonal study process.[1] NLE encourages the CAISO to initiate these stakeholder discussions as soon as possible so that more progress can be made while waiting for the CAISO to return to this issue. It may be most efficient to fold discussions related to TPD, including the TPD allocation scoring rubric, into the proposed workgroup tasked with considering the scoring criteria for the study process.

NLE is additionally concerned about the transition period and the impacts that may result for Cluster 14 projects after the CAISO implements the IPE reforms. Some Cluster 14 projects are awaiting policy-driven upgrades that are very likely to be approved in the 2023-2024 TPP cycle. Due to timing of CAISO Board approval for the upgrades, some projects would not receive deliverability in the 2024 TPD allocation cycle, and it is anticipated that these projects will park for one year and then be eligible for a TPD allocation in the 2025 TPD allocation cycle. Cluster 15 projects should not receive priority over Cluster 14 projects, which developers strategically sited in areas of anticipated available deliverability. The CAISO should not allow Cluster 15 projects—that apply as Option A in zones where the 2023-2024 TPP triggers policy upgrades—to receive awards for all of the available TPD (i.e., up to the proposed 150 percent threshold in the study process), which would leave nothing for prior-queued Cluster 14 projects.

2) Eligible TPD allocation groups for Energy Only projects

The CAISO proposes to limit eligibility for Energy Only projects seeking deliverability to TPD allocation group C (i.e., projects that have achieved commercial operation).^[2] The CAISO claims this proposal would reduce the number of less viable projects in the queue. NLE cautions against adopting this proposal as it is insufficiently justified. Many projects that have previously converted to Energy Only and remain in the queue have made progress with their development milestones and may be more viable than projects with more recently completed studies. Further, additional deliverability may result from future TPP upgrade approvals or from Option B project upgrades, and Energy Only projects should be eligible for this additional deliverability under all of the TPD allocation groups. This proposal is also unnecessary because the one-time withdrawal opportunity will provide the needed incentive for less viable projects to drop out of the queue.

3) Prioritization of long lead-time resources

As part of the continued work to modify the TPD allocation process, the Straw Proposal states the CAISO’s intent to develop a methodology to ensure transmission capacity is reserved for emerging technologies, like offshore wind.^[3] Though NLE recognizes that the CAISO has not yet put forth a specific proposal, NLE is wary of this concept.

The market and offtakers are best positioned to identify the most cost-effective technologies to deploy, and the CAISO and the CPUC have rightly not been overly prescriptive in selecting specific technologies. That said, the CPUC has “expressed interest in long-term investments in resources that require long development timelines, in the pursuit of resource diversity, as well as to aid in the development and/or commercialization of promising technologies that can help reach California’s climate goals.”^[4] The CPUC’s IRP proceeding is currently investigating issues and policies associated with development of these resources. Recognizing this, the CAISO should not reserve transmission capacity for specific resources unless the CPUC or the legislature provides explicit procurement mandates–detailing where transmission is needed, the size of the need, and the timeline for bringing resources online—and the LSEs subsequently procure those resources.

If the CAISO acts prior to receiving a specific procurement mandate, it risks reserving transmission capacity for resources that may end up being too expensive or not feasible. This would also create a substantial risk that the future grid would not have sufficient resources needed to meet demand. With PTOs continuing to experience construction delays for approved transmission upgrades, the risk is that much more significant.

b) Interim Deliverability

The Straw Proposal states the CAISO’s intent to “continue to work with stakeholders in both the IPE initiative and the Deliverability Assessment Methodology initiative to construct a methodology where a multi-year Interim Deliverability allocation process could bridge the gap between the in-service date of an LDNU and the project’s requested [commercial online date (“COD”)].”^[5] NLE supports the CAISO’s continued focus on this issue because it would help provide contractable assurance of Interim Deliverability.

Additionally, the multi-year Interim Deliverability proposal should include both ADNUs and LDNUs. The Straw Proposal only mentions LDNUs, but bridging the gap between the in-service date of an ADNU and the project’s requested COD is a more significant concern. Informing a developer of a multi-year Interim Deliverability award based on a limited LDNU evaluation would be somewhat irrelevant because the annual Net Qualifying Capacity assessment conducted as a project approaches COD includes an ADNU screening. The ADNU screening may determine that, in fact, there is no Interim Deliverability available, thus rendering the previously limited LDNU evaluation useless. NLE encourages the CAISO to perform multi-year Interim Deliverability studies that include both ADNU and LDNU screenings and take into account each projects’ current COD. NLE understands that this may lead to lower Interim Deliverability values for years that are farther into the future, but that is better than operating under the false assumption that Interim Deliverability is available.

[1] Id. at 22, 38-39.

^[2] Id. at 39.

^[3] Id. at 21-22.

^[4] CPUC, Assigned Commissioner’s Amended Scoping Memo and Ruling at 7, Rulemaking 20-05-003 (Aug. 21, 2023), available at: https://docs.cpuc.ca.gov/SearchRes.aspx?docformat=ALL&docid=518155091.

^[5] Straw Proposal at 41.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

a) Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects?

NLE appreciates the CAISO including the one-time withdrawal opportunity in the Straw Proposal. However, NLE is concerned that the current proposal would not provide a sufficient incentive for projects to withdraw. The CAISO also recognizes issues with the timing and mechanics of this proposal. Modifying the proposal to provide immediate and full refunds would drastically improve the effectiveness of the proposal. NLE restates that is sympathetic to cost concerns, but the reduced need for future developer/ratepayer funding for unneeded upgrades would serve to mitigate costs associated with refunds. NLE encourages stakeholders and the CAISO to continue to explore this proposal—as it represents the most significant opportunity to relieve queue congestion and ensure that only the most viable projects remain in the queue.

b) Are the updates to the Limited Operation Study sufficient?

NLE does not have any comments on this item.

c) Comments on adding asynchronous generating facility requirements in the SGIA

NLE does not have any comments on this item.

d) Comments on removal of suspension rights

NLE does not support the proposal to remove suspension rights as the CAISO has not demonstrated any harm that would result from retaining this process.

e) Comments on TPD Transferability proposal

NLE does not have any comments on this item.

f) Comments on viability criteria and time-in-queue limit

NLE does not have any comments on this item.

g) Comments on project modification updates

NLE supports the CAISO’s decision against moving forward with proposals to limit the timing or the number of Material Modification Assessment (“MMA”) requests. However, NLE continues to urge the CAISO to adopt the proposal to expand the list of changes that do not require MMAs (e.g., inverter changes and gen-tie combinations).

h) Comments on postings for shared network upgrades

NLE does not have any comments on this item.

i) Comments on timing of incorporating MMAs into the GIA

NLE does not have any comments on this item.

j) Comments on timing on starting network upgrades

NLE does not have any comments on this item.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

NextEra Energy Resources, LLC (“NextEra Resources”) appreciates the opportunity to comment on the CAISO’s Interconnection Process Enhancements (“IPE”) – Track 2 Straw Proposal. Throughout the IPE working group meetings, NextEra Resources has advocated for the need to reform the rules governing the interconnection process so that well-sited and financially healthy projects can emerge through a streamlined process and supported the general direction the CAISO seemed to be taking in the development of the IPE reform problem statements and associated principles. However, the direction the CAISO has taken with the straw proposal has introduced both ambiguity and complexity to several reform areas that warrant further clarity and consideration. Additionally, there are three critical issues on which CAISO has not sought stakeholder feedback that NextEra Resources highlights below.

First, CAISO has concluded it will remove from the scope of the IPE initiative all reforms in compliance with FERC Order No. 2023 (“Order 2023”) and will address them, instead, through their December 2023 compliance filing. NextEra Resources seeks clarification as to how this affects the IPE initiative. It is understandable if CAISO simply means that those issues required to be addressed on compliance – e.g., how the CAISO tariff already meets Order 2023 requirements, tariff changes necessary to comply with the Order 2023 requirements, or independent entity variations that are already in the tariff and which are necessary to comply with Order 2023 – will be outside of the scope of the IPE initiative since stakeholders will otherwise have the opportunity to comment on whether CAISO has complied with the final rule in another docket. However, NextEra Resources strongly opposes the tacit implication in CAISO’s notice that interconnection reform enhancements that go beyond those in Order 2023 (even if related) cannot be addressed in the IPE initiative. CAISO has the right to adopt independent entity variations and should do so. Those enhancements should not be deemed outside of the scope of the IPE initiative.

A central tenet of NextEra Resources’ advocacy on interconnection reform has been that the value to generation developers of participating in the interconnection process has been substantially undervalued due to low cost of entry relative to the demand for CAISO grid access. NextEra Resources has proposed several reforms to properly reflect the value of entry to the queue, including financial security and study deposits and more stringent site control requirements. These reforms, of course, are more expansive and go beyond the pro forma measures applicable to all transmission providers in Order 2023. One size, however, does not fit all. Certainly, the scope of needed generator interconnection reforms for a transmission provider like an investor-owned utility outside of the CAISO Balancing Authority Area differs from those facing CAISO. Without knowing how the CAISO plans to address these elements in detail or whether further reforms may be addressed by stakeholders in the IPE Track 2 proposal, it is impossible to assess the appropriateness of the CAISO’s Order 2023 compliance filing. In addition to clarification on the scope of the IPE Track 2 proposal given the Order 2023 compliance filing, the CAISO should provide stakeholders the opportunity to review and comment on the changes CAISO contemplates making in its compliance filing prior to its submission.

Second, the stated purpose of Order 2023 was to “ensure that interconnection customers are able to interconnect to the transmission system in a reliable, efficient, transparent, and timely manner, and will prevent undue discrimination.”[1] CAISO now proposes to limit the requests that a developer may submit in any given cluster application window to 25% of the available transmission MW capacity across the ISO footprint for that cluster. Ostensibly, CAISO’s cap is unduly preferential toward one subset of developers and unduly discriminatory toward developers with long track records of success. CAISO justified the cap in a stakeholder meeting on concerns over the possibility for “market power issues.” But this concern ignores that developers of any size must demonstrate to FERC in seeking market-based rate authorization and subsequently in triennial market power updates that neither they nor their affiliates in the CAISO market have market power or can erect barriers to entry, including through the control of sites where a developer (or its affiliates) are planning to build new generation facilities. Market power tests have been developed by FERC through multiple rulemakings and case-specific determinations made upon application for market-based rates and in triennial market power updates. NextEra Resources is unaware of any CAISO claim in a FERC proceeding that a developer has market power or can create a barrier to entry through the development of new generating facilities. But that is exactly what this proposed cap would mean—and here it would be CAISO (supplanting FERC) which would make that determination based on no developer-specific evidence. Consumers benefit when development outcomes are driven by rules applicable equally to all developers, and not from rules that arbitrarily skew outcomes by capping capacity quantities a developer may propose in a cluster or by imposing arbitrary rules with unknown consequences.

Additionally, CAISO proposes to limit the amount of capacity that it will study in any zone to up to 150% of that zone’s available transmission capacity. For similar reasons, NextEra Resources strongly opposes this proposal in its current form. Applying a zonal MW cap would arbitrarily reduce the number of projects that can compete to be built to meet demand and has the potential to drive-up resource adequacy costs due to limited supply. It should be the marketplace and not CAISO that makes these determinations. And, consistent with Order 2023, CAISO should accept ready projects into the queue without limits based on available system transmission capacity. Allowing ready projects to enter the queue using these vetting criteria will eliminate speculative projects and will give the CAISO useful information that should be used to drive planning. NextEra Resources supports solutions that strike the right balance of managing queue cycles and supporting robust competition that will maintain reliability at the lowest cost reasonably possible, while also responding to customer demand for resources seeking interconnection to the CAISO system. This element of the straw proposal fails to achieve that balance and should be removed from further consideration.

Finally, a fundamental issue that remains unaddressed in CAISO’s straw proposal relates to the CAISO’s persistence in only applying reforms on a solely prospective basis. NextEra Resources has previously commented that without applying reforms to previous clusters and existing older projects, the potential impacts associated with any process improvements would be so far out into the future that they would not address the immediate problem of an interconnection queue that is overburdened with non-viable projects. CAISO has proposed that the straw proposal apply to Cluster 15 and future clusters but has not sufficiently explained why existing non-viable projects that have lingered due to existing gaps in the current interconnection process can’t be addressed. While concerns over retroactive ratemaking have been discussed tangentially, the concern is contradicted by the fact that other regions have successfully adopted interconnection reform that utilized transitional clusters and other processes to quickly shepherd projects already in the queue through the remaining stages of the interconnection process.

NextEra Resources feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection: 

NextEra Resources maintains that the viability of a zonal approach to interconnection is largely dependent upon the quality of the information provided to stakeholders, consistency of single line diagrams for each of the transmission zones, clear identification of available TPD allocation behind each of the transmission constraints, and the ability to provide this information in a consolidated format at least 6 months prior to the commencement of a cluster generation interconnection request window. Having advanced access to this information would help our power flow modeling and assist in prioritizing locations for early-stage development. CAISO has noted that existing information related to boundaries is generic and does not include subareas. Yet, without a clearer understanding of what information will be available, it is difficult to provide any additional feedback at this time.

[1] Order No. 2023, 184 FERC ¶ 61,054 at P 1 (2023)

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU.

NextEra Resources maintains that seeking to incorporate Load Serving Entity (LSE) interests/commercial procurement for projects that are filing prospective queue positions is highly speculative and impractical for the following reasons:

1) There is no certainty of the project this early in the process and the information available to an LSE is limited to solar and storage megawatts (MW) and project location.

2) The Cluster 15 study results are likely to return commercial operating dates (COD) in 2033 and beyond due to study timelines and necessary upgrades. As such, it will be challenging for any LSE to confirm their interest in a project when LSEs have only just begun to procure through 2028.

3) It is unclear how CAISO would define commercial interest. Would an LSE need to provide a letter confirming their interest in a particular project?

b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements.

Please see NextEra Resources’ responses under c and d below.

c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria.

NextEra Resources supports the CAISO’s suggestion to commence a scoring criteria workgroup to explore refinements to the straw proposal and would be interested in participating. At present, the proposed design of the scoring criteria introduces too much ambiguity. The original intent of the scoring criteria concept was for the CAISO to be able to perform a quick evaluation of how far a project has progressed to assess and compare its viability with other projects. Several elements of proposed criteria in the straw proposal (e.g., offtaker interest, commercial readiness, and permitting status) are neither clear nor measurable. As NextEra Resources noted in the September 28 stakeholder meeting, requiring a “letter of interest” from an offtaker is too broad. The permitting process for projects associated with the California Energy Commission override process and the National Environmental Policy Act (for projects with federal nexus) would require comparable milestones to county or city permitting (typically via a conditional use permit and undergoing review through the California Environmental Quality Act (CEQA)) for a developer to demonstrate progress and be scored similarly. It would be highly problematic for projects sited on land managed by the Bureau of Land Management to be disadvantaged simply because the metrics are not comparable or there are not enough metrics to score as high as a CEQA project. Additionally, NextEra Resources agrees with other stakeholders that defining commercial readiness as having an executed PPA with a LSE prior to the initiation of the study process (and without knowing the costs and timing of network upgrades and interconnection facilities or the availability of deliverability for LSEs to meet their RA obligations) is both impractical and highly unlikely and will need to be revisited in the workgroup.

As part of future workgroup discussions, NextEra Resources also encourages the CAISO to reevaluate the granularity associated with the proposed point system. Creating wide margins for scores introduces the potential for debate and subjective human judgement. Once the workgroup has identified clear and measurable criteria, the points that are assigned should be based on information that can be quickly verified, assigned a single score (rather than a range of scores) and potentially automated.

d. Please provide feedback on auction design and use of auction revenues.

CAISO has indicated that the intent of the auction is secondary to the scoring criteria and that the most viable top scoring projects would move to the study process while lower scoring projects that cause the total MW for a zone to cross the capacity limit for a zone will participate in the auction. NextEra Resources understands this to mean that the auction is intended to be used in a limited context as a “tie-breaker,” but the complexity of the design introduces several unanswered questions, as outlined by comments submitted by the California Energy Storage Alliance (CESA). If the CAISO has well-defined and objective scoring criteria that sets a minimum score to qualify for study, then an auction process is not needed and CAISO should allow all projects meeting the minimum score to enter the queue because they all demonstrate that they are ready. These projects accept large withdrawal penalties if they do not reach COD, and this, combined with the increased commercial requirements to enter the queue, should decrease the number of projects qualified to enter the queue. If further reforms are needed in the future, they can be taken up in a future enhancement initiative.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

NextEra Resources appreciates CAISO’s attempt to maintain a pathway for projects seeking to interconnect in zones that have no TPD available but rather than make the Option B process more viable, the straw proposal only appears to have introduced more stringent requirements. In the absence of any cost caps associated with Area Delivery Network Upgrades (ADNUs), projects will continue to be exposed to unsustainable costs throughout the study process should other projects that triggered those upgrades drop out years later. Unless CAISO can address this fundamental problem with the Option B design, it seems likely that Option B will continue to be an improbable pathway for interconnection customers. Additionally, CAISO should create an option for Option B projects to self-build these self-funded projects.

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

NextEra Resources is supportive of the CAISO’s suggestion to form a subgroup to develop a more defined proposal to the TPD allocation process and would be interested in participating directly in that effort. However, the CAISO has proposed some preliminary modifications and approaches in the straw proposal that warrant further consideration (as detailed below):

1. CAISO indicated in the straw proposal that it plans to prioritize projects like offshore wind in the TPD allocation process. NextEra Resources disagrees with this proposal. It provides an undue preference to one resource type and directly contradicts CAISO’s prior statements that it will not prioritize certain resource types over others. Furthermore, offshore wind projects are far from “ready” given the additional non-transmission infrastructure required to enable manufacture and shipping of equipment. Assuming through prioritization criteria a non-wind resource has scored highly in the viability scoring criteria phase and has completed the cluster study process, the CAISO would effectively deprioritize the non-wind resource in the TPD allocation process. While offshore wind may be prioritized in the CPUC resource portfolio, it is important for the CAISO to ensure that all viable and ready projects (regardless of resource type) are treated consistently and fairly.

2. CAISO has limited provision of multi-year interim deliverability to projects behind Local Delivery Network Upgrades (LDNUs). When pressed in the stakeholder meeting on why multi-year interim deliverability would not be inclusive of ADNUs, CAISO staff indicated that based on internal reviews they thought it more likely for there to be interim deliverability available for a project requiring LDNUs and less likely for a project to receive multi-year interim deliverability based on available capacity on ADNU. While NextEra Resources understands that the likelihood of multi-year interim deliverability is less likely for upgrades driven by ADNUs (given the broader geographic area and number of generators claiming that they will reach a Commercial Operation Date (COD) so far into the future) the CAISO has already agreed to run a multi-year study for LDNUs and acknowledged that the ADNU deliverability process is already assessed on an annual basis. As such, the closer that generators get to a COD, the more likely it is that the subsequent multi-year study will change. While this still may result in years where deliverability is unlikely, it’s unclear to NextEra Resources why the incorporation of ADNUs would pose an additional obstacle.

3. CAISO acknowledged in the straw proposal the need for alignment of the TPD allocation process with first-ready, first-served principles through revisions to the current affidavit scoring process associated with the TPD allocation process. NextEra Resources has advocated throughout the IPE initiative that CAISO treat Cluster 13 and earlier projects fairly and non-discriminatorily in terms of access to deliverability. This is so given that the majority of Cluster 13 projects were allocated 0% deliverability (due to being evaluated immediately prior to the CAISO’s most recently approved TPP upgrades) and were forced to convert to Energy Only (EO) to remain in the queue, despite being further along in maturity than Cluster 14 projects, which are still in study, and despite the near certainty that the transmission upgrades in the recently approved TPP would have facilitated more Cluster 13 projects getting deliverability allocation (and by extension having the ability to reach market much sooner than Cluster 14 projects). CAISO’s decision to apply reform to Cluster 15 projects and future projects effectively means that there are no plans to address this inequity in the upcoming TPD affidavit cycle and to allocate transmission plan deliverability to first ready projects. This contradicts the intent of FERC Order 2023. CAISO has indicated that the only reason a change could not be accommodated was that there was not enough time to make a tariff change and obtain the necessary approvals prior to February 2024, which is the opening of the next TPD allocation cycle. While NextEra Resources recognizes the challenges in timing, failure to redress such a fundamental problem is highly discriminatory against Cluster 13 first-ready projects that are often multiple years more advanced than Cluster 14 projects in permitting and site control, have earlier achievable CODs, and are more first-ready than Cluster 14 projects. The CAISO has, in the past, expedited initiatives it deemed important (for example the CAISO’s 2017 Expedited GIDAP enhancements policy which extended parking provisions and revised the interconnection request window in less than 3 months). NextEra Resources urges the CAISO to find a creative solution to address this problem by exploring a transmission process that might allow these EO projects to seek an allocation on par with Cluster 14 projects (currently still in the study process), based on their readiness. In other words, a Cluster 13 project with a perfect or near-perfect score on the affidavit should not be relegated to a lower priority than a Cluster 14 project that scores very few points.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects?

NextEra Resources does not object to the proposed assignment of costs of withdrawn projects. If the CAISO does not plan to apply any of the reforms in the straw proposal to projects in older clusters and offers no detail regarding how the CAISO will implement changes to cost of entry, deposits, financial requirements, or specific site control requirements, it remains unclear how offering a one-time withdrawal opportunity would incentivize existing projects to use the one-time withdrawal opportunity in the first place, thereby accomplishing the goal of minimizing the queue. Additionally, CAISO should provide clarity regarding when the withdrawal period would even begin.

b. Are the updates to the Limited Operation Study sufficient?

NextEra Resources appreciates CAISO's move to provide earlier access to Limited Operation Studies via increasing the lead time from 5 months to 9 months. However, NextEra Resources notes that 9 months lead time ahead of synchronization is not sufficient to enable certainty for commercial commitments. Offtake agreements, major equipment procurement lead times, and construction commitments are all made well ahead of 9 months before COD. NextEra Resources recommends extending the Limited Operation Study "open window" to 18 months before COD.

c. Comments on adding asynchronous generating facility requirements in the SGIA

NextEra Resources has no additional comment at this time.

d. Comments on removal of suspension rights

CAISO should eliminate its proposal to remove suspension rights for all projects that execute a LGIA. The removal of suspension rights would contradict FERC Order 2023 as the proposed treatment of LGIA deposits clearly indicates FERC’s intention to retain an Interconnection Customer’s ability to suspend.[1]  While CAISO may propose changes pursuant to its independent entity variation, to date there has been no reasonable explanation as to why it should depart from the terms of Order 2023. NextEra Resources nevertheless supports limiting suspension rights to more specific circumstances or for limited durations rather than removing them altogether. While we appreciate the problem caused by projects parked in the queue for long periods, suspensions have legitimate business reasons and that option should still be available, even if restricted. Furthermore, the limited number of suspended projects that the CAISO cited in the straw proposal would not suggest that project suspension has been (or will continue to be) a primary contributor to queue backlogs.

e. Comments on TPD Transferability proposal

While NextEra Resources recognizes that few energy only (EO) projects achieve a COD, the CAISO’s proposal to force a project transferring its deliverability to withdraw from the queue at the time of the transfer is too restrictive. Although this proposal would not apply to a single parent company that transfers all or a portion of deliverability from one queue position to another within a group of projects at the same POI, there is increasing commercial interest in EO solar projects for RPS compliance despite the lack of deliverability. As such, there could be limited situations where the ability to transfer deliverability and maintain an EO status is desirable. f. Comments on viability criteria and time-in-queue limit; g. Comments on project Modification updates; h. Comments on postings for shared network upgrades; i. Comments on timing of incorporating MMAs into the GIA; j. Comments on timing on starting network upgrades. NextEra Resources does not oppose the CAISO's queue management proposals as described in Section 5.6 of the straw proposal. Queue management requires timely responses and accountability from transmission owners in negotiating LGIAs, though these are often delayed by many months due to transmission owner contracting resource constraints. NextEra Resources has no additional comments on the remaining elements of the proposal at this time.

f. Comments on viability criteria and time-in-queue limit; g. Comments on project Modification updates; h. Comments on postings for shared network upgrades; i. Comments on timing of incorporating MMAs into the GIA; j. Comments on timing on starting network upgrades.

NextEra Resources does not oppose the CAISO's queue management proposals as described in Section 5.6 of the straw proposal. Queue management requires timely responses and accountability from transmission owners in negotiating LGIAs, though these are often delayed by many months due to transmission owner contracting resource constraints. NextEra Resources has no additional comments on the remaining elements of the proposal at this time.

[1] Order No. 2023, 184 FERC ¶ 61,054 at P 718 (2023)

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

NCPA appreciates the opportunity to comment on the IPE 23 straw proposal and commends CAISO for making significant progress toward mitigating the serious problems plaguing the CAISO generator interconnection process. NCPA particularly appreciates that the straw proposal aims to implement the principle that the transmission planning and interconnection processes should be designed to support the procurement needs of all CAISO Local Regulatory Authorities (LRA).[1] NCPA looks forward to working with CAISO to develop workable processes and timelines by which non-CPUC procurement needs can be incorporated into the transmission planning and interconnection processes.

NCPA engages in resource planning at the direction of and on behalf of its member Load-Serving Entities’ (LSE) LRAs. NCPA has long been concerned about the representation of its members’ planning needs in the CAISO Transmission Planning Process (TPP). This concern has grown as the CPUC resource planning process has become more targeted and identified zones for transmission construction for portfolios required for the CPUC-jurisdictional utilities. NCPA appreciates and strongly supports CAISO’s recognition that the plans of non-CPUC jurisdictional utilities must also be incorporated into the overall planning process. Indeed, it would be unduly discriminatory to exclude the non-CPUC jurisdictional LSEs from the TPP, especially where the zones identified in the TPP will form the basis for deciding which proposed projects will be studied for interconnection. Non-CPUC jurisdictional LSEs are subject to largely the same reliability and environmental requirements that apply to other utilities in order to serve their ratepayers. Accordingly, their needs must receive the same planning consideration. NCPA looks forward to working with CAISO to incorporate its resource plans and approved projects into the TPP.

As the entity responsible for ensuring that the projects in NCPA’s resource plan come to fruition, NCPA also shares the concerns of CAISO and most GIDAP participants that the study process and the queue have become increasingly unmanageable. Large numbers of projects, many of which will never be built, drain the time of transmission planners and are so numerous that the study results themselves are both unreliable and needlessly expensive. CAISO itself has stated that it will take so much time to process the existing projects in prior queues while revamping the GIDAP requirements that it does not anticipate opening another cluster before 2025.[2] Project developers who are not already in an existing queue likely cannot contemplate a commercial operation date for their projects any earlier than 2032.

NCPA is authorized to develop its own projects. Although in many cases it would proceed through an RFP process for generator proposals, it is not obligated to do so. In instances where it contemplates alterations or additions (such as storage, for example) to its existing generation facilities, it would likely build its own projects and enter the queue as the project developer.

In either context, however, NCPA’s ability to ensure that the projects its members are relying upon to meet customer load reach commercial operation is jeopardized when the interconnection study process is clogged with non-viable projects that will never reach operational status. NCPA further appreciates and supports CAISO’s recognition that application of commercial scoring criteria will ensure that the most viable projects enter the study process. 

NCPA can support the zonal approach subject to developing a workable process for incorporating the procurement needs of non-CPUC jurisdictional LSEs. NCPA applauds CAISO for recognizing this need and is committed to assisting CAISO in further developing the concepts in the straw proposal. The existing Memorandum of Understanding (MOU) that CAISO entered into with the CPUC and CEC ensures that the resource priorities adopted by those agencies are reflected in transmission planning; this straw proposal is a first step towards ensuring equivalent treatment for non-CPUC LRAs, who are not signatories to the MOU, but who cannot legally be excluded from these processes without rendering them unduly discriminatory.

Incorporating non-CPUC LRAs’ procurement priorities into the planning and interconnection processes requires a recognition that these LRAs’ resource planning procedures differ somewhat from the CPUC’s. NCPA can prepare NCPA-level resource plans, ratified by its member LRAs. These plans would include high level determinations of the amounts of specific resource types (i.e. solar, storage, out-of-state wind) that NCPA seeks to add and may also specify specific projects the agency intends to construct. NCPA also anticipates identifying preferred locations or zones. And, as a general matter, NCPA prefers to plan or contract with projects near its loads to save on grid congestion costs and enhance reliability. Timing is also a consideration: NCPA’s resource planning processes may not align with CAISO’s TPP in a given year, so further work is needed to determine when and how NCPA would provide information to CAISO.

Ultimately, the mere inclusion of non-CPUC-jurisdictional LSE resource plans into the TPP is not sufficient to ensure that the projects those LSEs need will actually be built.  A more detailed plan to manage those projects in the study process is still needed.

[1] We note that, during the working group process that preceded the straw proposal, there was widespread support for the seven principles that were adopted: Principle #2 is that the interconnection process will take into account resource planning and procurement of the CEC, CPUC and other LRAs; Principle #5 states the goal of interconnection is to support procurement necessary to achieve portfolios established by non-CPUC LRAs.

[2] CAISO, 2023 Interconnection Process Enhancements: Track 2 Straw Proposal at 12 (Sept. 21, 2023) (“Straw Proposal”).

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

NCPA supports incorporating the interests of LSEs early in the interconnection request process. While incorporating LSE plans in the TPP is an excellent start, it is not, by itself, sufficient. LSEs cannot reliably serve their loads unless viable projects can proceed expeditiously through the queue to a study that provides meaningful and durable results. To make that happen, CAISO must ensure that the projects that are most viable and ready to proceed move forward into the queue. 

Treatment of Approved Non-CPUC Jurisdictional LSE projects

The CAISO has proposed that it will automatically study non-CPUC jurisdictional projects whether they are inside or outside of the CPUC-approved zones. NCPA strongly supports the concept of incorporating LSE interests in the generation interconnection process and supports the CAISO’s proposal. NCPA is looking forward to working with CAISO to implement this proposal in a workable fashion.

For this reason, NCPA supports the proposal that preferred resources in an LSE’s resource plan be studied as Option A projects even if those projects are outside the zones identified in the TPP.[1] Non-CPUC jurisdictional LRAs’ planning timelines may not align with CAISO’s TPP in any given year, and there is particular uncertainty as to whether the new TPP with non-CPUC jurisdictional LSE input will be ready and applicable to the next study cluster. Thus, study of projects outside of CPUC-designated zones is necessary to ensure non-CPUC jurisdictional LSEs have a path for non-zonal projects.

As applied to projects located in the designated zones, CAISO has proposed that it will automatically study “any project that a non-CPUC jurisdictional LSE demonstrates is a preferred resource in its resource plan, that has been approved by its Local Regulatory Authority.”[2] NCPA strongly supports this study path. It effectively recognizes that LSE developed projects are highly viable and meet commercial viability criteria. When NCPA builds a project itself, it engages in an extensive planning process to assess project costs and viability. Member LSEs enter into contracts to fund studying the feasibility of the project. However, before NCPA would submit a project into the GIDAP process, it would enter contracts with its LSE members in which each member commits to take a specified share of the output and to pay a pro rata share of the project costs. These types of projects are thus approved by each LSE and its associated LRA and backed by ratepayer money. It makes sense to conclude that they are commercially viable.

The study provision is consistent with provisions that FERC has already accepted with respect to LSE projects and commercial readiness scoring criteria. FERC has recognized that projects developed by LSEs are more likely to be viable and to move forward in the queue. As an example, FERC has recently approved generator interconnection process reforms that incorporate non-financial commercial readiness criteria for maintaining an interconnection request and automatically deem LSE projects to have met them . . .. [3] The Arizona Public Service Company  provisions do not allow LSEs to avoid other readiness criteria such as site exclusivity and payment of deposits, which are required in any case by FERC Order 2023.[4] The Commission accepted the criteria, stating that it was persuaded that “because load-serving entities have an obligation to serve their native load, generating facilities that are being developed by such entities are generally less speculative for purposes of demonstrating customer readiness . . ..”[5]

Scoring Criteria and Scoring Criteria Working Group

As an initial matter, NCPA would like to express its willingness to participate in a working group for the development of scoring criteria. NCPA believes it can provide a unique perspective acting as both an LSE and an entity who develops generation projects on behalf of its Members.

Regarding the Scoring Criteria for Prioritization to the Study Process described in Section 4.2.5 of the Straw Proposal, the primary driving force behind project development in California is the need to serve load, and enable LSEs to achieve their regulatory and carbon reduction goals.[6]  As such, NCPA strongly believes that the “Interest from an Offtaker” and “Commercial Readiness” scoring criteria categories should be heavily weighted in CAISO’s assessment.  Projects to be constructed by an LSE or that intend to contract with, or that have contracted with, an LSE with rate base will ultimately be the most viable and likely to be constructed.

The Auction Concept

NCPA has previously registered its opposition to the using an auction concept in the generator interconnection process. NCPA remains concerned that an auction will drive up the costs of proposed projects and that those costs will be passed through to ratepayers. The cost of securitizing a large amount, even if that amount is eventually returned when a project comes online, is not zero. Those additional costs will be passed along. Also, an auction favors the project developers with the deepest pockets.

[1] Straw Proposal at 34 n. 14.  NCPA seeks confirmation that its understanding of CAISO’s proposal is correct, in light of the typographical error in footnote 14.

[2] Straw Proposal at 26.

[3] Arizona Public Service Company, 184 FERC ¶ 61,188, PP 38-40 (2023). See e.g. Arizona Public Service Company, Attachment O Proposed Large Generator Interconnection Procedures § 7.6.3(b) FERC Docket No. ER23-2398-000, eLibrary No. 20230714-5079 (allowing a demonstration of commercial readiness if a Generating Facility “is being developed by a Load-Serving Entity.”)

[4] Improvements to Generator Interconnection Procedures and Agreements, Order No. 2023, 184 FERC ¶ 61,054 (2023).

[5] 184 FERC ¶ 61,188, P 40.

[6] Straw Proposal at 25.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

NCPA generally supports the revised Option B process. 

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

NCPA generally supports the concept of interim deliverability.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

NCPA has no comment at this time.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

Ormat Technologies (Ormat) appreciates the opportunity to provide responses to the CAISO IPE 2023 straw poll. Ormat’s comments are specific to experience gained over five decades developing and producing 1GW of geothermal power, recovered energy generation (REG), and battery storage in California and worldwide. Ormat supports CAISO’s proposal to provide information to stakeholders regarding the zonal approach to facilitate better-informed decision making of potential applications prior to opening the queue.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

a. Ormat asks for recognition of the permitting needs associated with long-lead time geothermal resources because it furthers the state’s policy goals and is a preferred resource and generally already under contract with LSEs.

b. No opinions

c. Ormat believes having LSE interest as indicated by RFO, short list, or a PPA should be a significant component in the scoring criteria and is one that is easily validated.

ci. Ormat would appreciate the opportunity to participate.

d. Ormat supports the CAISO auction process and scoring approach proposal.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

No opinion

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

a. Transmission Plan Deliverability (TPD) allocation must prioritize projects in high demand from LSEs due to MTR obligations. Geothermal has unique capabilities but confronts barriers due to lead time and location inflexibility which emphasize the impact that TPD reform can do to achieve project diversity.

b. Ormat supports CAISO’s proposed conditional deliverability approach.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

a. A one-time withdrawal opportunity would thin the queue which is helpful to Ormat projects because they have PPAs in place.

b. Limited Operation Study Updates extend timing request from five months before the project’s synchronization date to nine months which can be helpful in the unlikely event that requesting LOS becomes appropriate.

c. No opinion at this time

d. The removal of suspension rights from LGIA is not particularly significant.

e. Ormat supports prioritization of long lead time resources specific to resource planning portfolios.  Limiting TPD deliverability would necessitate having a project transfer TPD deliverability to transfer from queue. 

f. The queue would be thinned by limiting the queue time for projects without GIA but acknowledges the potential need for exemptions for identified as long lead time by a regulatory entity.

g. Improving the process for updating MMA and post-COD modification processes would not affect Ormat projects.

h. Revised requirements for funding network upgrades when one interconnection customer is ready to proceed with construction of a shared network upgrade then all participants in the upgrade must post their security regardless of deliverability status and/or GIA execution.

i. Incorporating MMAs into the GIA would not affect Ormat projects.

j. If network upgrades commence when the first notice to proceed is provided to PTO and the third security posting is received, it would speed completion of network upgrades.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

PG&E appreciates this opportunity to provide comments on CAISO’s Track 2 straw proposal.  PG&E generally supports the proposal of providing data to stakeholders to enable the zonal approach to interconnection, with the understanding that PTOs will need adequate time to compile the necessary data for transmission to CAISO.  PG&E suggests the CAISO work with the PTOs early on to identify what information will be required from the PTOs and develop a timeline that provides for adequate time for this information to be provided.  

As a general matter, PG&E also recommends that the CAISO host a stakeholder meeting prior to filing their implementation plan for complying with FERC Order 2023 (Order 2023) so that stakeholders can have a clear understanding of CAISO’s overall plan for implementing / operationalizing Order 2023 and any subsequent FERC approval of interconnection enhancements stemming from this initiative. 

Separately, PG&E requests the CAISO clarify what it means by the following statement from Section 4.3.3 of the single-phase study process as the statements seem contradictory.  Order 2023 provides that the Interconnection Facilities Study Agreement is to be provided with the cluster study report, and a PTO will have 90 calendar days to complete the study.  However, the CAISO statement that they will perform the reliability study as it does today with the Phase II interconnection study is contradictory since that involves performing both System Impact Study and the Facilities Assessment Study as part of the cluster study. 

“As noted, the ISO intends to comply with the FERC Order No. 2023 study process to the greatest extent possible. This will include adopting a single-phase study process.  In other words, the ISO will perform the reliability and deliverability studies as it does today with the Phase II interconnection study.” 

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

Without having more detail about the specific details, and under the current procurement construct, PG&E continues to have reservations about the inclusion of ‘Interest from an offtaker’ and ‘Commercial readiness’ as scoring criteria to prioritize projects within the zonal approach.  PG&E understands that CAISO desires to link LSE resource procurement efforts more closely with the interconnection process, however under the current paradigm, it appears to be a challenging task. Under the current process, many CPUC-jurisdictional LSEs run RFOs for new resources after a CPUC procurement order is issued (e.g., Mid-Term Reliability decision) and, in PG&E’s instance, evaluate projects based on several factors, including interconnection study status, and identified network upgrade costs.  If the CAISO desires to have LSE resource interest drive which projects are prioritized for study within Option A projects, than there may need to be an examination for a paradigm shift with how the CPUC directs procurement and sequencing of LSEs’ RFOs and interconnection cluster windows. 

PG&E also believes the scoring criteria should be modified to include some consideration of giving preference/score to interconnection requests of resources identified by the CPUC and CEC resource planning as being needed within particular zones.  PG&E is concerned that CAISO’s statement that “[c]onformance with IRP scenarios and state policy needs should be inherent in the zonal approach, which is based on CEC and CPUC resource planning” will not actually play out as expected in the real-world.  For example, a transmission line that is approved to deliver in-state wind or geothermal resources as part of the CAISO transmission planning process from a certain area as identified by the CPUC as being needed in their resource plan, may in fact not materialize if other resources (e.g., solar, storage, etc.) flood a specific zone with interconnection requests and all score higher based on the proposed scoring criteria and crowd-out that other resource that the CPUC or CEC selected in their resource planning for that area and reliability needs.   

PG&E would like to request to be included in a workgroup to refine the scoring criteria. 

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

PG&E is still in the process of evaluating the straw proposal and reserves the right to provide further comments on any concerns in the future.

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

PG&E is still in the process of evaluating the straw proposal and reserves the right to provide further comments on any concerns in the future.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

One-Time Withdrawal Opportunity 

PG&E supports CAISO’s efforts to clean up the queue and provide interconnection customers a one-time withdrawal opportunity, however the one-time withdrawal opportunity should be constructed in a manner as to not incentivize the current issue to remanifest in the future with interconnection customers again adding hundreds of projects to the queue and letting them linger with the expectation they will have another opportunity to withdraw without much financial consequence. 

For constructing the framework/timeline of the one-time withdrawal opportunity, PG&E urges the CAISO consider the following items: 

• Once the CAISO closes the one-time withdrawal window, the CAISO will need to provide PTOs with sufficient time to complete a re-assessment study prior to re-starting Cluster 15.  The amount of time needed for a re-assessment study will be dependent on the number of projects that withdraw, but it is vital PTOs have adequate time to complete these studies the is an updated view of the system prior to studying Cluster 15 projects. 

• PG&E also believes for the one-time withdrawal opportunity to be successful to the maximum degree possible, the CAISO should first undertake its TPD allocation process for the upcoming 2023-2024 Transmission Plan prior to initiating the window for developers to withdraw from queue.  Otherwise, PG&E is concerned that if the withdrawal opportunity is prior to the TPD allocation for the 2023-2024 Transmission Plan, interconnection customers will wait for the TPD allocation in hopes of being allocated TPD and will decide not to pursue withdrawing from the queue due to wanting to see if they get TPD. 

As PG&E understands CAISO’s proposal, the proposed allocation of PNU costs between PTOs and the withdrawing interconnection customers non-refundable IFS portion would in effect limit the maximum cost sharing portion for withdrawing customers to 15% of the PNU cost, while the PTO would bear 85% of the PNU cost and be responsible for funding the upgrades rather than an interconnection customer advancing funds for the upgrade.  Depending on the amount and size of PNUs that were assigned to withdrawing customers, the proposal may create a steep burden for PTOs to upfront fund the construction of the PNUs.  PG&E recommends CAISO consider (1) a greater cost sharing arrangement by the withdrawing customer for PNU costs, including PTOs using the refundable IFS portion subject to later refund by the PTO, to finance the PNU construction or (2) modify the network upgrade scope that is the subject of this proposal and mark them as CANUs and transfer them to the next cluster of projects requiring the scope.  The latter would avoid a cost shift to PTOs, and would minimally increase the MCR/MCE for those projects. 

PG&E also has the following clarifying questions for the CAISO to help better understand the one-time withdrawal proposal: 

• Will the withdrawn project’s non-refundable IFS posting be liquidated (for cash) to fund the PTO’s continuation of the needed PNUs? 

• Is PG&E understanding accurate that this proposal would be for GRNUs to the withdrawn project, but has been marked as a PNU (precursor-NU) for later queued projects? 

Removal of Suspension Rights 

PG&E supports CAISO’s proposal for the removal of suspension rights to support efforts to keep projects moving towards commercial operation.? 

TPD Transferability Proposal 

PG&E is still reviewing this proposal and requests CAISO provide more detail on what rules will be established for the process of TPD transferability, especially to minimize interconnection customer efforts to apply later deliverability allocations to earlier queued projects.  

Viability Criteria and Time-in-Queue Limit 

PG&E supports the CAISO’s viability criteria and time-in-queue proposal as it clarifies and tightens the requirements to remain in the queue, however PG&E is still concerned about allowing projects to remain in the queue for up to 7 years.  

Project Modification Request Policy Updates  

While PG&E supports CAISO’s proposed Policy Modification Request Policy Updates, we recommend that for project modification requests and post-COD modification requests, the CAISO make clear the time to complete the engineering analysis and Facilities Reassessment Report is increased from 45 calendar days to 60 calendar days. 

Earlier Financial Security Postings for Projects with Shared Upgrades

PG&E requests CAISO clarify if the proposal is applicable to projects prior to Interconnection Agreement (IA) execution, particularly those in parked status, or only those with executed IAs. 

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

PARS Energy appreciates the opportunity to comment on  the IPE Track 2 Straw Proposal.

Adoption of a Zonal approach creates some certainty that a project may be awarded Deliverability and this is positive. In fact, this is a great  improvement over CAISO 's existing process where even being inside a Local Capacity Area does not guarantee Deliverability award.. 

What is not clear is how CAISO will develop these Zones and whether the availability of Deliverability in all Zones will be simultaneous. How does CAISO plan to identify the impacts of a large approved transmission upgrade on multiple zones? 

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

PARS Energy is interested in participating work Group to refine Scoring/Auction criteria.

If a scoring criteria approach is ultimately adopted, PARS Energy supports a pass/fail scoring metric. Scoring by graduated scales (say 1-10) can lead into many disagreements and disputes.

Auction based award will most likely be more complex and will require more staff to administer. Two separate categories of “price -related” and
“non-price related” attributes of each interconnection request will have to be identified.   

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

PARS Energy does not support placing projects outside Zones under Option B and have them financially responsible for the necessary upgrades without any reimbursements. This will significantly increase the risks of investments in renewable resources.

Resource Adequacy is a CPUC requirement and a resource has to be Deliverable to provide RA services. Non-California ISO entities such as LADWP, SMUD, SVP, CCAs etc. also have to provide RA services.

PARS Energy would like to propose that CAISO consider identifying whether the Option B resources can be Deliverable to above mentioned entities. This can potentially increase interest in adoption of Option B  alternative.

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

PARS Energy believes the concept of Interim Deliverability is a good one and expedites the construction of resources that have Partial Deliverability and have potential to acquire Full Deliverability due to planned upgrades. Interim Deliverability can minimize the need for Parking projects.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

No Commments

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

No comments at this time.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

Qcells supports adding domestic content adder to scoring criteria.

Qcells supports opening the QC16 cluster during next April (there should be an open IC window in 2024).

Qcells is ok with a one-time withdraw proposal.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

No comments at this time.

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

No comments at this time.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

No comments at this time.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

REV requests more information on the timeline by which information will be available to interconnection customers. CAISO notes that the heatmap will be available by Q3/4 2024, but is that also the same expected timeline for the detailed transmission availability report? Would this be updated the same time every year or is it expected to change by year?  

Zonal information needs to be available as soon as possible in order to inform interconnection requests, particularly if requirements such as zonal limits, site control, and screening criteria are added. REV suggests MW availability at a detailed level be set at least six (6) months prior to queue window opening, but ideally at least 9 months ahead. REV is concerned that even 6 months prior to queue opening makes it infeasible to have annual queue windows with up-to-date transmission availability information. For example, if the Cluster 15 reopens in April 2024 and Cluster 16 is planning to open in April 2025, that means transmission information would be needed by at least October 2024. However, it seems though there is no way that Cluster 15 study information would be incorporated into the zonal data by that time. Or would CAISO assume all available capacity would be taken by Cluster 15 and only new 2023-24 Transmission Plan projects would create the incremental capacity for Cluster 16? CAISO has committed to having annual queue windows (which REV supports), but more clarity is needed around this zonal data timing especially if CAISO plans to limit applications by zonal availability.

CAISO needs to be clear on when information will be available for Cluster 15 if CAISO expects to restart the queue with the zonal constraints in place. CAISO will likely need to release this information prior to FERC approval of Order 2023 compliance and while the stakeholder process is ongoing in order for customers to achieve site control requirements and points for screening criteria.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

REV does not support the zonal cap, scoring criteria, and auction approach and instead suggests revising the baseline requirements and allowing projects to be studied that meet those requirements. While REV appreciates CAISO’s innovative thinking on this proposal and providing more details, there are many critical questions that remain unanswered and not enough time to fully work through the details to be implemented for Cluster 15. Instead, REV strongly suggests that CAISO set baseline/entry requirements that requests need to meet and the project knows whether it will be studied. This way the interconnection customer knows it is not wasting time and money on site control or permitting and chasing more points for a project that, while it may rank high and be very viable, may ultimately not pass through the filter if another project scores slightly higher. By raising the baseline requirements bar, CAISO can filter out speculative projects, and projects can prioritize resources more efficiently. CAISO could also add increasing requirements (e.g. additional financial postings) through the study process so that a project needs to prove it is viable along the way in order to proceed. Additionally, complying with FERC Order 2023’s site control requirements may be a significant filter on its own to reduce the number of projects entering the queue, without creating a more elaborate scoring mechanism. CAISO could create a working group to develop these requirements. This baseline requirements approach would mean a zonal cap limit, scoring criteria, and auction would not be necessary and would greatly simplify the proposed intake process compared to the Straw Proposal. However, REV offers the comments below in the case that CAISO does move forward with its currently proposed approach.

On the Zonal Approach, REV requests more clarification on the exact process CAISO will use to identify availability and screen projects. This approach needs to be clearly laid out to avoid confusion and protests in the process. REV also offers the following observations and suggestions:

• Sub-zones may be necessary for some zones when there are areas of constraint or clear differences within the zone. For example, the SDG&E zone is wide from east to west, and the constraints in the western urban area would affect MW availability differently than in the eastern more rural area.
  • If a project requests to connect in a zone that has available MW, but the specific location is constrained, how will it be assessed? Conversely, if the zone is constrained but the specific location is not, will it not be allowed because of the zonal constraint?
• Transmission constraints in one zone may impact MW availability in another zone (Nested constraints), CAISO should clarify how this is factored into constraints.
• CAISO should clarify that the FCDS MW available in a zone is based on accredited capacity, not nameplate capacity. CAISO should also be clear on what information the MW are based, such as what year’s transmission plan upgrades are included and the most recent TPD allocation cycle that is accounted for in availability.

Site control requirements should be clarified prior to submittal to FERC for Order 2023 compliance. In particular, if CAISO is proposing to change its site control requirements to comply with FERC Order 2023, these should be vetted with stakeholders and established as soon as possible if they will be applicable to Cluster 15.

REV opposes the proposed 25% cap of available MW per developer. This cap is prior to going through any scoring criteria filters and zonal limits, so even if a developer submits more than 25% it does not guarantee that they would be studied at that level. Additionally, this arbitrary limit could be excluding viable projects that could be beneficial to ratepayers, which is important as affordable energy is an increasing concern in the state. CAISO has not presented any procurement or interconnection data to show that this cap is necessary. Additionally, CAISO stated that mergers and acquisitions are not factored into this 25% cap, which provides a significant opportunity for bypassing this requirement through other means. If CAISO does move forward with this proposal, it should clarify whether this would apply to Cluster 15.

REV also opposes prioritizing long lead-time resources and reserving capacity in the interconnection process. CAISO’s Interconnection Process should be technology neutral and not favor or prejudice any particular technology. Prioritizing certain technologies in the interconnection process would be discriminatory. If resources use ratepayer funded upgrades, then any technology that helps meet the state’s clean energy goals should be allowed to access that capacity. California has shown that policy upgrades that may have had certain technologies in mind, but allowed all technologies to access the capacity, have benefited ratepayers and advanced clean energy goals. For example, Tehachapi transmission line was built for wind and Sunrise Power Link was built for solar, but a diverse set of resources use the transmission and it has not inhibited development of wind and solar, respectively. If transmission needs to be reserved for specific technologies, then it should be done using a merchant or subscriber transmission model such as TransWest Express or Sunzia.

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU.

• The CPUC’s Integrated Resource Planning (IRP) Process is based on individual LSE procurement plans, and the resulting preferred system plan gets sent to CAISO for transmission planning. The CAISO’s annual Transmission Plan is using the zonal approach to identify new transmission needs to accommodate new resources. Therefore, REV submits that LSE interests on commercial procurement activities is already built into the transmission and interconnection process at an early stage with the IRP process and does need to also be an additional screen to interconnection applications. Interconnection customers are already using the IRP portfolios and Transmission Plan to identify viable project locations.  Further efforts to incorporate LSE interest could inadvertently lead to creating winners and losers, reduce overall supply, and therefore increase cost. The interconnection process needs to remain neutral to offtakers and be more driven by transmission availability and other commercial viability criteria.

b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements.

• REV is skeptical of the sealed bid auction process to resolve ties in scoring criteria. If interconnection customers are reimbursed for the financial security posted after the auction, this incentivizes high bids to ensure it is chosen if subject to auction, and favors larger companies.
• REV suggests that, instead of the auction process, CAISO use a “soft cap” and allow projects above the 150% cap for those requests that are tied. In CAISO’s example on page 30, this would result in 500 MW being studied instead of 400 MW. While this is likely to be lumpy and a flexible cap given project size and unknown number of interconnection requests that will tie, REV suggests that it will be more equitable, avoid unnecessary costs to developers, and still provide a limit on projects studied compared to today. Additionally, the 150% threshold is already low given the historical success rate of projects moving through the queue, so CAISO has the flexibility to expand this limit in cases of a tie.

c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO.

REV remains concerned about the success of a scoring process to filter for viable projects, particularly given the timing of the study process and the potential to waste resources to improve a score when it may not make it through, even if that project has a high likelihood of ultimate success.

If CAISO moves forward with the scoring criteria, REV offers the following suggestions:

• The first two proposed categories of “Letter of Interest” and “Commercial Readiness” should be removed as they are duplicative and the majority of stakeholders have clearly spoken against these criteria as not viable given the CAISO and LSE processes.
  • The Letter of Interest would be non-binding and therefore should not be given weight in the process as it would favor side partnerships with LSEs and developers that may be inappropriate at the early stage of development. This could put LSEs in a position of power in the interconnection process in being able to pick winners and losers with these additional points, even though it is developers that are taking the financial risk in the interconnection process.
  • The Commercial Readiness criteria have already been discussed at length as inappropriate given California’s procurement process. Developers require network upgrade costs to be able to submit a viable bid in a Request for Proposals from LSEs. Having a scoring criteria to incentivize early procurement would either inflate ratepayer costs (if bids are inflated to accommodate the development risk) or put developers in an untenable risk situation if they are held to bids they submitted prior to the interconnection process. Additionally, what happens if a project has a PPA but then doesn’t get through the scoring criteria filter? Also, developers and LSEs need to know COD timeline for the project before entering into any contract. Given the scope of network upgrades would not be known at the very beginning of the process, it would be impossible for any party to know projected COD and hence entering into a commercial agreement would not be practical.
• In permitting status, REV suggests removing the option of “Conditional Use Permit granted” as infeasible at this stage of development, since this permit is an expensive process that is not feasible to undertake without knowing the project will even be studied and if studied what is the expected cost to interconnect and COD timeline. Developers need to know this before they start spending time and resources to get a Conditional Use Permit approval.
• In project location criteria regarding the location of projects, rather than incentivizing no ADNU zones only, CAISO should also incentivize zones with low-cost and low timeline ADNUs. This category can then be given lower score than zones with no ADNUs. Projects that need low to no transmission network upgrade costs should be able to attain higher scores as building these should lead to less burden on the ratepayers and accomplish the same policy goals. REV recommends this category be given higher weight than currently proposed.  
• REV supports the Expansion of Operational Facility and Project Location criteria and recommends CAISO to increase the weightage of this category These projects in most cases already have adequate infrastructure/ permits/ experience etc. to successfully expand and deliver MWs to the grid quickly, which should address any near-term capacity shortages and overall meet policy goals.
• A new section could be added that is a score for the developer (e.g. Interconnection Customer, its affiliates, and the parent company) viability, with criteria such as financial viability/credit worthiness and also history of successfully bringing projects to COD (in CAISO or other areas).
• REV opposes allowing non-CPUC jurisdictional LSEs to automatically have their project studied and not go through the scoring process. This unfairly biases non-CPUC jurisdictional LSEs and puts their projects above CPUC jurisdictional LSE projects in competing for limited MWs in zones. If CAISO’s intention is to have a process for these projects outside of zones to be studied without having to pay for upgrades, it should clearly create that process but weigh in the risk of inadvertent preferential treatment.

1. Please indicate interest in participating in a workgroup to refine scoring criteria.
   1. Yes, REV is interested in participating in a working group on the scoring criteria. This workgroup will be an important way to work through this important topic in a timely manner. REV also suggests other working groups could be created to work through issues such as the Option B process.

d. Please provide feedback on auction design and use of auction revenues.

• In addition to the comments in 4.b., if CAISO pursues the auction, it should consider a trial run of this auction concept or presenting other examples to trouble shoot issues that may arise prior to launch. For example, is CAISO going to require projects to downsize to meet the 150% threshold or will it allow for lumpiness and going over that amount if it wins in the auction?
• REV supports using non-refundable auction funds to offset and support still-needed network upgrades.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

In the stakeholder process this summer, several stakeholders (the PTOs in particular) identified opportunities to streamline the Phase I study process, including using AI tools, simplified and standardized models, and more to reduce the time required for validation and allow for quicker Phase I process. CAISO states it is moving to a single-phase process, but did not address these study process proposals that could improve the intake process. REV suggests these are included in the next iteration of the proposal.

a. Please provide feedback on the modifications to the Option B process.

• REV greatly appreciates and supports CAISO’s clarifications on issues 1-7 to the Option B process and that this option is available for projects seeking to interconnect in areas that have no available or planned TPD capacity.
• REV strongly suggests that CAISO reconsider that “Option B will not be available to projects that were not selected to be studied in transmission zones that have available or planned capacity.” While REV understands not allowing Option B after TPD allocation because it would trigger restudy, REV suggests Option B be available for projects to pursue if the customer does not make it through the scoring criteria screening or auction.
• If customers are given the option to convert to Option B before any studies are completed, then it should not impact study timelines or trigger any restudies. Because interconnection customers would still be required to fund the applicable network upgrades, it is unlikely this Option B would be pursued by many and therefore should not significantly impact study levels. Only projects that the developer deems are high value and viability would choose this option. Additionally, this suggestion is aligned with Principle 1, to concentrate development within zones and to provide opportunities to identify and provide alternative points of upgrade.
• REV suggests CAISO consider opportunities for developers to share cost of upgrades required in the Option B process. It seems that this is not prohibited in the proposal, but also is not explicitly allowed. There could be simple options for CAISO to facilitate this shared upgrade process that could be explored in a working group.
• REV suggests that there could also be opportunity in specific areas with low cost, lower duration to construct non-nested ADNUs. For example, there can be areas where the TPD estimates are getting close to the available transmission capability of existing system, which will result in a very small number of Option A projects. REV suggests that CAISO give more flexibility in scenarios like this for projects to participate as Option B due to their failure of qualifying as Option A projects. Option A projects could end up getting the remaining capacity without triggering upgrades and Option B projects will get any incremental capacity that becomes available due to the proposed ADNUs above. REV also encourages CAISO to consider flexibility of these Option B projects to be treated similar to Option A projects in scenarios where CAISO TPP approves a policy driven upgrade in this zone. This should also make the project eligible to recover its entire IFS amount (30% of the ADNU cost).
• REV does not support creating minimum viability score for Option B projects. If these projects are volunteering to finance all assigned network upgrades, that already provides significant incentive to ensure the project is viable and the developer should be able to determine where it prioritizes resources to make that project viable. REV does agree that baseline requirements like study deposits and site control should still be required for Option B projects.

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

a. TPD allocation

REV understands CAISO waiting to address this until other topics are more set, but REV urges CAISO to not forget to address this important issue in the final proposal and potential changes for Cluster 14 projects. As stated previously, there is a major concern with the disconnect in requirements for receiving or retaining TPD allocation and the PTO upgrade timelines. As parties note, some upgrades are not expected to be completed until after 2030, yet no LSE is procuring capacity out that far, so meeting the requirement to even be on a shortlist is not feasible. While CAISO made changes to this process recently, this new upgrade timeline challenge became apparent in Cluster 14 Phase 1 results, and is likely to persist with Phase 2 results and Cluster 15. Therefore, Cluster 14 projects in this upcoming TPD allocation cycle will be in a bind on how to maintain deliverability while they wait for necessary upgrades.

If CAISO forms a subgroup on this topic, REV would like to participate.

b. Interim Deliverability

CAISO should clarify whether this topic lives in IPE or the Deliverability Assessment Methodology initiative. REV supported multi-year interim deliverability allocation process in the Deliverability initiative and is awaiting CAISO’s revised proposals with clarifications. CAISO should also routinely discuss with PTOs whether anything can be done to mitigate delays in construction of facilities required to interconnect projects, especially for long-lead time projects that may be due to vendor delays.   

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects?

REV supports the one-time withdrawal opportunity proposal, and requests clarification that applicability to “all active projects” includes those in Cluster 14. REV supports CAISO’s proposal to hold the IFS that is still needed to fund the PNU until the PNU is in service as a way to reduce the cost-shift burden.

b. Are the updates to the Limited Operation Study sufficient?

REV supports CAISO increasing the Limited Operation Study from 6 to 9 months before synchronization. While more time in advance would be helpful, if CAISO moves forward with the interim deliverability proposal that could address the crux of the issue of a project wanting to come online prior to a network upgrade being completed.

c. Comments on adding asynchronous generating facility requirements in the SGIA

REV has no comment at this time.

d. Comments on removal of suspension rights

REV does not support the removal of suspension rights on the LGIA.

e. Comments on TPD Transferability proposal

REV requests CAISO to provide additional details regarding TPD transfers in the background section of TPD transferability proposal. It will be helpful if CAISO can provide specific examples in regards to some of the situations where Tariff does or does not allow TPD transfers, for instance between an earlier and later queue cluster project.

f. Comments on viability criteria and time-in-queue limit

REV supports the time-in-queue limit, so long as CAISO adds the specific exceptions contemplated of PTO extensions or other long-lead time network upgrades. Given the expected online dates of network upgrades, these exceptions are necessary to keep a project viable while waiting for upgrades.

g. Comments on project Modification updates

REV generally supports the proposed changes to the Modification process. However, REV stills encourage CAISO to reconsider options such as a list of modifications that would not require a detailed formal review by CAISO and PTOs. REV understands the short circuit concerns raised by ISO in the stakeholder calls, but believes that there are still areas in CAISO where these issues are not that pertinent. For example, any inverter change MMA request in these areas could potentially be approved without a formal review. There could be other scenarios where CAISO could consider relaxing formal review requirements

h. Comments on postings for shared network upgrades

REV supports this proposal to that if one interconnection customer is ready to proceed with construction of a shared network upgrade then all participants in that upgrade must post the needed security for and fully fund that upgrade as applicable. CAISO may need to add an additional milestone date in the process for those that have not yet executed a GIA for this to occur. By requiring posting for shared network upgrades, this will provide a more equitable process for those projects ready to proceed and not hinder their commercial viability while waiting for other customers. 

i. Comments on timing of incorporating MMAs into the GIA

REV supports CAISO’s proposal wait to amend the GIA with MMAs until close to the time the project is set to synchronize to the grid. In cases where the LGIA could not be updated before synchronization, REV requests CAISO to consider the latest approved MMA along with the original GIA for all the CAISO processes including the NRI process, which requires LGIA as one of its bucket requirements for the project to sync to the grid. REV believes this will prevent CAISO staff and the interconnection customer from having to rush to update these LGIAs. REV supports the idea of updating the LGIA post COD and after the final reconciliation amendment is in place.

j. Comments on timing on starting network upgrades

REV appreciates CAISO including this proposal and supports adding a new milestone to the GIA requiring the PTO to notify the interconnection customer and ISO when activity has begun on the network upgrade and interconnection facilities. As CAISO notes, this will provide transparency as to when the upgrades are started and allow greater certainty as to when projects can come online.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

 SDG&E has no comment at this time.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

SDG&E believes that the CAISO and stakeholders should work together to simplify the type and amount of technical interconnection data that’s required during the initial phase of the interconnection process. It is SDG&E’s experience that technical data provided by developers early in the process changes substantially by the time projects reach COD. SDG&E continues to advocate for detailed technical data to be submitted later in the interconnection process.

Regarding the incorporation of procurement activities as commercial viability criteria, SDG&E believes that being shortlisted or having a PPA may be beneficial scoring criteria. SDG&E’ concern is this information might not be available early in the interconnection process and might be better suited when studies have been completed. SDG&E also notes that more details will be needed to be able to finalize the auction proposal. It is still in its infancy and we look forward to CAISO providing more details before SDG&E provides more solidified feedback.

Regarding scoring criteria, SDG&E believes that a project's ability to provide local RA is an important criterion for CAISO to consider. To that end, SDG&E is interested in participating in workgroups to refine scoring criteria.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

When it comes to the study process, and in addition to the simplification of the initial technical data submitted by interconnection customers, SDG&E would like to see further clarification in IPE on how and when Energy Only projects will be studied. This will be critical given that the CPUC’s portfolio is forecasting/mandating ~29 GW (sensitivity portfolio for the 2022-2023 TPP) of EO resources by 2035. 

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

SDG&E has no comment at this time.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

SDG&E supports CAISO’s one-time withdrawal opportunity. This is an important step to ensure that only the most viable projects remain in the queue. However, this should be considered an initial step in the process. SDG&E continues to reiterate and reemphasize its proposal to require the 3^rd posting as a requirement to move on to the GIA phase. This requirement would reflect the appropriate commitment for the final stages of the interconnection process. This is conceptually similar to FERC’s “LGIA Deposit” requirement in its recent order, Improvements to Generator Interconnection Procedures and Agreements (RM22-14-000).

SDG&E also supports CAISO’s time-in-queue proposal as one of the most important aspects of the IPE proposal. The queue today is already unmanageable even if new applications are not accepted. Therefore, it is important to ensure meaningful requirements that will streamline the existing queue. While the current time-in-queue proposal is an improvement over the status quo, there are still some ambiguities around what happens to the time-in-queue limits after projects are converted to EO and surpass the 8-year limit without a PPA. To reduce this ambiguity, SDG&E encourages CAISO to consider withdrawing projects from the queue should projects not meet the NTP and 3^rd posting deadlines including in the IPE proposal instead of adding the additional complexity of converting these projects to EO. 

SDG&E maintains that the existing 5-month deadline is not sufficient to meet the intent of the LOS. Furthermore, SDG&E does not see any substantial benefits to the proposed increase to 9-month. SDG&E recommends using a 12-month timeframe, which matches NERC defined horizon for Planning activities. Anything less than 12 months is reserved for Operations and real-time activities. SDG&E also recommends that the CAISO work with the PTOs to further leverage and reinforce the current Operational Reliability Study (ORS) provision in the CAISO tariffs. SDG&E believes that the annual ORS could provide more benefits and insights than LOS studies.

Finally, SDG&E supports the proposal for all interconnection customers assigned to a shared network upgrade to post for that upgrade when the upgrade is needed by the first customer. It is a reasonable proposal that ensures that all parties looking to interconnect are sufficiently committed, thus decreasing process delays and streamlining the queue.

SDG&E’s General Comments:

SDG&E wants to echo Susan Schneider’s comment during the 9/28 stakeholder meeting that the CAISO should share how it will comply with FERC Order 2023 in the IPE documents, even if it is in an appendix. Particularly, SDG&E hopes CAISO will elaborate on how the study, restudy and then the facility study processes will be implemented. Furthermore, the CAISO should clarify in its proposal if the ISP and EIT will still be in the CAISO Tariff or removed.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

The combined implementation of both FERC Order 2023 and the Straw Proposal cumulative requirements would excessively limit the interconnection application within Cluster 15 queue and beyond. As stated in the CAISO’s stakeholder meeting, various elements of the Straw Proposal are now considered out-of-scope for the 2023 Interconnection Process Enhancements (IPE) initiative because they are FERC requirements under Order 2023. Adoption of this Order will help the CAISO address some of the challenges with Interconnection Request Intake that were identified in the Straw Proposal and significantly reduce the backlog in Cluster 15 and future interconnection queues. However, the Straw Proposal includes additional requirements such as the zonal based approach. These proposals are redundant and unnecessary since they would address issues already targeted by Order 2023 and would have a negative impact on the interconnection application process by overly constraining interconnection applications. For example, following the implementation of the FERC Order 2023, it is unclear whether Cluster 15 projects remaining in the queue would meet the Straw Proposal’s requirement to fulfill the 150% of the available and/or planned transmission capacity in each zone.

Further, it is unclear how would the Straw Proposal’s recommendation to use a zonal based approach to inform customers of the transmission capability within the current study areas be reconciled with the approach adopted in the CAISO’s Deliverability Assessment Methodology Revisions stakeholder process (Deliverability Process). The proposal in the Deliverability Process would restrict deliverable capacity for specific points of interconnection (POIs) based on the impact of megawatt (MW) injections at those POIs on a certain area deliverability constraint. The zonal approach described in the Straw Proposal would encourage interconnections in transmission zones with available and approved transmission capacity. However, these transmission zones include many POIs, which at a granular level, may have deliverability constrains not properly captured in the zone. The Straw Proposal does not provide any guidance regarding the CAISO’s methodology to reconcile the available capacity results, accounting for different deliverability constraints, and combine these constraints into a single Available Transmission Capacity for a zone or study area.

For example, as shown in the table below, the Transmission Capability Estimates for the CPUC’s Resource Planning Process referenced in the CAISO Stakeholder presentation describes the Transmission Plan capability behind each of the Area Deliverability constraints in the SCE Northern Area, which range from 0 to over 9,000 MW. However, the Straw Proposal fails to explain reconciliation process between Area Deliverability constraints and the Available Transmission Capacity for entire SCE Northern Area.

CAISO needs to provide transparency and involve stakeholders in the development of the methodology it intends to utilize for the calculation of the Available Transmission Capacity in every zone. This methodology must ensure that transmission capacity in a zone is not being restricted unfairly. For example, in a zone like SCE Northern Area, with transmission plan capabilities ranging from 0 to over 9,000 MW, the methodology should not punish all the POIs in the study area by allocating an Available Transmission Capacity number that have corresponds to the POIs with the lowest transmission plan capability (i.e., zero).

After the development and implementation of an agreed upon methodology, the CAISO must provide sufficient data early in the interconnection process so that interconnection customers are informed about the boundaries of the zones, transmission capacity, and estimates of network upgrade costs to connect in zones with less or no available transmission capacity. The proposal to move from a two-phase to a one-phase study approach makes the early availability of this capacity information even more pressing. Interconnection Customers must be able to evaluate the interconnection process risks and costs based on accurate and timely information.

Finally, the CAISO should also provide an annual report and published it at least six months in advance of the cluster window. At a minimum, the report should provide Interconnection customers sufficient information regarding the following two items:

• Available Capacity in every Transmission zone
• Costs of Network Upgrades ($/MW) to interconnect at various POIs within a zone.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

None

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

None

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

None

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects?

None

b. Are the updates to the Limited Operation Study sufficient?

None

c. Comments on adding asynchronous generating facility requirements in the SGIA

None

d. Comments on removal of suspension rights

None

e. Comments on TPD Transferability proposal

None

f. Comments on viability criteria and time-in-queue limit

None

g. Comments on project Modification updates:

None

h. Comments on postings for shared network upgrades:

None

i. Comments on timing of incorporating MMAs into the GIA:

None

j. Comments on timing on starting network upgrades:

SB Energy agrees with the CAISO proposal that a new milestone should be added to the interconnection process, requiring the PTO to notify the interconnection customer and CAISO when activity has commenced on the network upgrade and interconnection facilities.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

Given CAISO’s proposal to limit the volume and locations of interconnection requests (IR) studied, SEIA believes it is crucial that CAISO provide a sufficient level of data transparency early in the interconnection process so that interconnection customers (IC) understand the boundaries of the priority transmission zones (TPP zones) and the estimated magnitude of interconnection costs in those zones. This data transparency will be even more important as CAISO moves from a two-phase to a single-phase interconnection study process. SEIA supports the AES proposal to develop and provide an annual report that is published at least six months prior to the cluster window opening to provide ICs with sufficient information and time to develop projects. This report should include:

• the current available capacity, 
• points of interconnection in each TPP zone,
• timing of planned deliverable capacity in each TPP zone,
• the status of current queue, including number of projects in each zone,
• firm price range per MW for network upgrade interconnections in each TPP zone,
• average line tap cost,
• and a clear rubric of needed resources based on coordination with state planning agencies.

SEIA recognizes that some of this information is already provided through different ISO reports, but believes that consolidating and presenting this information in a formal report will be invaluable to developers and offtakers and will provide ICs with a common point of reference by which they can develop projects.

SEIA also urges CAISO to provide more detail on how they plan on defining these TPP zones and calculating the available capacity in each zone. These constraints are often overlapping and impact POIs behind the constraint(s) differently; it will be critical that developers understand the ISO’s proposed methodology and have access to this information well in advance of a cluster window opening. SEIA asks that this information be made available to interconnection customers ahead of Cluster 15 so that Cluster 15 interconnection customers can evaluate their interconnection requests.

SEIA suggests that CAISO consider opening an interconnection request window in April 2024 as currently scheduled.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

1. No comment.
2. SEIA supports the proposal to use scoring criteria to rank-order IRs for study and agrees with CAISO that additional stakeholder discussions are warranted. Given the importance of the scoring criteria in determining which projects will be studied, it is crucial that the metrics reflect commercial and developmental realities, as well as state and system needs. For example, SEIA supports the inclusion of “ability to provide Local RA” as a metric because it incentivizes and prioritizes projects that support the need for Local RA. SEIA proposes that the CAISO commit to a formal stakeholder process that takes place prior to a new IR window to revise the scoring criteria to ensure it continues to adequately incentivize and prioritize commercially viable projects as commercial conditions and system needs evolve.

SEIA appreciates that the current auction proposal limits the likelihood that an auction is needed. Beyond the potential cost impacts, SEIA is concerned that auction mechanism conflicts with the intent of the IPE proposal and introduces gaming opportunities for ICs. During the September 28^th IPE meeting, CAISO staff alluded to concerns that the auction will be used primarily by projects that have a score of zero. If this is true, the auction provides ICs with a chance to buy IR study capacity with undeveloped projects. This introduces several potential problems, including the opportunity for ICs to effectively “box out” other IRs to reduce competition for an affiliate project proposing to interconnect in the same zone. The proposal to require winning bids to post at-risk auction financial security is unlikely to discourage this kind of behavior since the IR is eligible for refunds of 50-85% depending on the timing of the withdrawal. Should CAISO proceed with an auction, SEIA recommends a minimum threshold score be required for an auction to be utilized.

3. SEIA supports scoring criteria that is simple, objective, and consistent with the development process. To that end, SEIA does not support a commercial readiness requirement. Interconnection customers cannot price PPAs or resource solicitations without knowing their interconnection costs, which is not available until later in the process. Incorporating commercial readiness as a scoring criterion would favor projects from utility-owned developers that could shift these costs to other parts of the business. Instead of imposing a commercial readiness requirement, SEIA supports a scoring system that accounts for a Master Supply Agreement or Master Purchase Agreement that would obligate the Interconnection Customer to purchase project parts in the future but does not require the purchase of specific parts.

Additionally, SEIA supports the comments of AES, New Leaf Energy, and RWE with respect to the scoring criteria. SEIA also proposes that CAISO include a “domestic content adder” in the scoring criteria.

4. SEIA would like to participate in workgroup.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

SEIA supports the overall effort to enhance the Option B process which is currently not a viable option for developers. SEIA supports the refund to Option B projects for LDNU security but encourages CAISO to consider other stakeholder proposals like the Vistra proposal for a network upgrade subscription model to make a viable interconnection pathway.

SEIA opposes the proposal to limit Option B to IRs in non-TPD zones. SEIA proposes that Option B be available to IRs that are not selected to be studied under the priority process or lose an auction so long as they meet the minimum score threshold applied to Option B. 

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

1. SEIA appreciates the stakeholder proposals submitted on this topic and believes these should be explored further in a working group dedicated to comprehensive TPD reform. Through IPE, CAISO and stakeholders should focus their efforts on quick fixes or relaxation of TPD allocation criteria for projects entering the 2024 TPD allocation process.

SEIA opposes the CAISO proposal to limit energy only projects to Group C for TPD allocation.

2. SEIA continues to support CAISO’s proposal to establish conditional deliverability and longer-term interim deliverability to the extent it is feasible.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

1. SEIA supports the one-time withdrawal opportunity as it provides withdrawing ICs some certainty that they will receive refunds without negatively impacting still need network upgrades or unduly burdening the PTOs.
2. Support.
3. Support.
4. Oppose. SEIA does not believe CAISO has justified the need to remove suspension rights. By CAISO’s own admission, suspension is not significantly utilized so it does not seem like removing suspension rights will provide any value or benefit but will eliminate a form of protection available to developers. Further, FERC recently rejected a proposal by the Arizona Public Service Company to remove suspension rights from its interconnection procedures, finding that removing the right “runs contrary to the Commission’s recognition in Order No. 2003 that suspension gives interconnection customers the flexibility necessary to accommodate delays that could affect large projects.” Arizona Public Service Company, 184 FERC ¶ 61,188, P 67 (2023).
5. No comment.
6. No comment.
7. SEIA supports the RWE proposal to implement separate MMA review timelines and deposit requirements for requests to differentiate between requests to update project milestones and technology changes.
8. Support.
1. SEIA opposes the proposal to modify the GIA nine months prior to the synchronization date included in the GIA. This change poses significant risk to developers as the GIA must be up-to-date and accurate for project development including contracting and PPA negotiations. SEIA supports RWE’s recommendation that the ISO develop and enforce transparent timing requirements for the PTO to draft and tender a GIA with the interconnection customer.
10. Support.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

The Six Cities appreciate the CAISO’s thoughtful approach to the Straw Proposal’s discussion of the “zonal” approach to the interconnection process and, in particular, the recognition of the role that non-California Public Utility Commission ("CPUC") local regulatory authorities play in the resource planning process for non-CPUC jurisdictional load serving entities.  The Six Cities agree that the interconnection process “need[s] to ensure consistent treatment of all load-serving entities ("LSEs") and offtakers—CPUC-jurisdictional and non-jurisdictional—within the CAISO footprint on matters of generator interconnection and transmission planning,” and, further, they support the CAISO as it “seeks to ensure opportunities for non-CPUC jurisdictional entities to have their project needs considered in the TPP.”  (See Straw Proposal at 8.) 

In the event that the CAISO proceeds with its proposed approach to zonally-based interconnection study processes, it is critical that non-CPUC jurisdictional LSEs have the ability to designate and proceed with development of resources in zones that may be different from the zones driven by CPUC resource planning and procurement.  For example, it is not clear that the diagram on page 13 of the Straw Proposal depicting various resource zones for purposes of the 2022-23 Transmission Planning Process reflects any information or inputs regarding the planning and procurement activities overseen by any entities other than the CPUC.  While the Six Cities acknowledge the CPUC’s role in providing portfolios of resources for the CAISO to study on behalf of a significant proportion of CAISO LSEs, the CAISO’s interconnection procedures should accommodate the range of policy choices undertaken by non-CPUC local regulatory authorities ("LRAs") and should not restrict or limit LSEs whose procurement and resource planning is subject to to such non-CPUC LRA oversight to zones or procurement areas solely designated by the CPUC. 

In the next iteration of its proposal, therefore, the Six Cities request that the CAISO clarify and provide additional detail regarding how the designated zones will reflect planning and procurement policies of non-CPUC LRAs and the process that it will use to obtain and include information regarding non-CPUC LRA planning and procurement, as contemplated in the Straw Proposal.  (See, e.g., Straw Proposal at 12, explaining that prioritization of projects will based on areas of planned capacity additions in the CAISO TPP, as established in LRA planning portfolios).  While the CAISO’s incorporation of planning and procurement by non-CPUC jurisdictional LSEs should enable procurement and/or development of resources by such entities throughout the CAISO’s planning area, any resource development that is occurring within the service territory of a non-CPUC-jurisdictional LSE, such as a municipal utility, should be automatically be entitled to designation as a permitted zone for study.  For example, if a municipal utility elects to develop a resource that is located outside of a specified zone and is committed to the development of such resource, either because the utility is developing the resource, is participating in its development through a joint action agency or similar arrangement, or has entered into a contractual commitment such as a letter of intent or power purchase agreement with a private developer, the CAISO should proceed with the interconnection process for said resource, which is demonstrably viable and does not pose the same development risks as other projects.  The Six Cities seek clarification that this is the CAISO’s intent with respect to the implementation of zones and, as discussed below, its proposal regarding the inclusion in studies of resources identified in non-CPUC jurisdictional LSEs’ authorized procurement plans. 

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

The Six Cities strongly support the CAISO’s proposal regarding the automatic inclusion of non-CPUC jurisdictional projects, if approved by the relevant LRA, in the interconnection and deliverability study processes.  For example, in the discussion of the applicable scoring criteria for the interconnection request application stage, the CAISO states that “with any scoring process, the ISO proposes to automatically include any project that a non-CPUC jurisdictional LSE demonstrates is a preferred resource in its resource plan that has been approved by its [LRA].”  (See Straw Proposal at 26.)  The Six Cities agree with this approach, and confirm that they will work with the CAISO on how to document such approved procurement by non-CPUC jurisdictional LSEs if appropriate. 

            In the event that the CAISO proceeds with the proposed process for an auction to determine the allocation of rights to be studied in the interconnection process in circumstances where the capacity associated with the interconnection requests exceeds the available and planned capacity plus a margin, then the Six Cities request that the CAISO confirm how projects that represent either development or procurement by non-CPUC jurisdictional LSEs will be addressed in the auction process and whether they will be required to participate, or whether they will proceed forward to the study phase as discussed in the Straw Proposal at page 26 and during the September 28^th stakeholder meeting. 

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

At this time, the Six Cities take no position on the proposed modifications to the Option B process.  

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

Stakeholders would benefit from a discussion of how the various revisions discussed in the Straw Proposal will interact with the deliverability allocation processes.  In the event that projects are included for study within a specified zone, is there expected to be greater assurance or a guarantee that deliverability (either full or partial) will be available for the projects?  As the Six Cities have discussed in this and prior initiatives, uncertainties regarding whether projects are likely to be awarded full capacity deliverability status has an impact on the ability and willingness of LSEs to make commitments, including to enter into or shortlist projects for power purchase agreements (“PPAs”), because LSEs are, in many or most cases, entering into PPAs for the purpose of acquiring the resource adequacy attributes as well as the energy from new projects.  In the event a resource is not eligible for use as a resource adequacy resource due to a lack of awarded deliverability, then the economics of procurement may be significantly altered.  Greater assurance of transmission planning deliverability ("TPD") awards to studied projects may improve the ability of LSEs to make commitments to projects at an earlier stage.

The Six Cities are supportive of further discussions regarding the CAISO TPD allocation process in this initiative, as discussed on page 39 of the Straw Proposal. 

With respect to interim deliverability and the CAISO’s “conditional” deliverability related proposal in the Generation Deliverability Methodology Review initiative, the Six Cities question whether the conditional deliverability proposal will result in a material increase in the amount of deliverability that can be used on an interim or temporary basis.  The CAISO appears to acknowledge the need for temporary deliverability status, but it appears that the solutions under consideration to date may not adequately address this need.  For example, the CAISO stated during the September 28^th stakeholder meeting in this initiative that it anticipated very little conditional deliverability would be available on a multi-year basis, which raises the question as to why alternatives that would materially increase temporary deliverability are not being proposed or considered. 

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

 The Six Cities do not have comments on the proposals relating to queue management at this time. 

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

Sonoma Clean Power (SCP) appreciates the CAISO’s commitment to develop a heat map and provide consistent single line diagrams with constraint boundaries. The CAISO’s example of existing datasets in the straw proposal is helpful. However, SCP echoes the other stakeholders comments made in the straw proposal presentation that the CAISO should compile all the available data into a single resource specifically geared towards documenting the interconnection capacity at the same granularity that the CAISO will use in calculating the 150% threshold. SCP also encourages the CAISO to provide better information on the areas where there is no TPD limitation— currently, the GIDAP results in areas without a constraint do not include a map or an estimate of additional TPD available (example: SCE Metro, Mesa – Laguna Bell).

Even after discussion in the meeting, there is confusion on how zones will be defined and how the CAISO will define available transmission capacity. The final proposal should provide clear information on the following questions:

1) Is available capacity equivalent to available TPD, or does it include all unused capacity (which may include projects in the queue that already secured TPD)? 

2) will projects be counted using their Pmax at the interconnection or using a methodology consistent with the GIDAP (e.g. solar and wind exceedance adjustments)? and

3) are “zones” equivalent to the TPD constraint zones or the broader “transmission areas” depicted in Figure 1 in the straw proposal?

If possible, the CAISO should consider developing a draft of the information described above based on assumptions that are consistent with the forthcoming 2024 GIDAP process. This will provide clarity to stakeholders on the format of data as well as calibrate the magnitude of interconnection capacity the CAISO will study with the 150% threshold.

SCP encourages the CAISO to reconsider its proposal to defer accepting new interconnection applications until 2025. Given that technical studies of Cluster 15 have not started and that down-selection criteria will not be finalized until early 2024, the CAISO has little to lose by reopening the queue and applying the revised criteria and FERC 2023 requirements to a larger set of projects. Supply chain and energy market dynamics have greatly changed in the past year—it is very possible that there are new applications that would be ready in early 2024 that are more viable than the current Cluster 15 composition. Keeping the door open provides more options to study resources that are in high demand by LSEs and will also provide earlier feedback to projects that are less viable so that they can prepare for the next interconnection cycle.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU.

SCP supports both increasing the weighting of LSE interest in the scoring criteria and identifying a more robust mechanism for gauging LSE interest than letters of interest or contract status. Although the zonal approach will increase the success rate of achieving deliverability for projects that enter the queue, it will reduce the optionality for LSEs given less total capacity will be studied. To mitigate this risk, it is important that the scoring used for gatekeeping the study process properly reflects the needed resource characteristics and portfolio diversity that LSEs desire. Otherwise, unwanted projects may waste study capacity and the market power for developers with desired projects will increase, resulting in higher costs to ratepayers and a slower path to California’s decarbonization.

In its comments in July, SCP advocated for the CAISO to consider a RIC-type mechanism for gauging LSE interest. SCP continues to be supportive of this approach, which provides a fair and insightful mechanism for the CAISO to gauge LSE interest in candidate projects. The CAISO expressed concerns with the potential timing implications of facilitating this type of process. SCP understands the desire of the CAISO to increase the efficiency of the interconnection process, but the current RIC process is very efficient: LSEs have less than two weeks to make their election and a similar turnaround could be instituted for interconnection scoring. It is also likely the LSE interest could be gauged in parallel with processes to validate interconnection requests and assign other scoring, thereby minimizing or eliminating any delay in the process.

The CAISO could also consider simplified alternatives to SCP’s original RIC proposal: instead of using capacity, the CAISO could do the following:

1) Have LSEs score each project on a 1-10 scale and take a load-weighted average for each project; or

2) Ask LSEs to score interest in various project, technology, and COD combinations ahead of accepting interconnection applications that could then be applied to submitted applications.

CAISO expressed concern that LSEs are asking for more agency at this stage when there was no enthusiasm for an LSE-driven approach earlier in the stakeholder process (concept 2 in the discussion paper). SCP shared the concerns from other developers that the completely LSE-driven approach proposed in the discussion paper would be unwise given LSEs are less familiar with interconnection constraints and commerciality. The zonal approach and FERC 2023 alleviate this concern by screening out projects that are behind large network upgrades, do not have site control, or do not demonstrate sufficient commerciality to afford increased security postings. Asking LSEs for their procurement interest in projects that meet those criteria is not only reasonable, but the best path towards moving projects forward that are needed to meet the California’s decarbonization and reliability goals and improve affordability.

b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. 

SCP continues to support the scoring criteria approach for gatekeeping the interconnection study process. A robust scoring system that reflects the readiness of projects and their compatibility with the needs of LSEs is preferrable to an auction mechanism that could provide an advantage to well-resourced developers. SCP agrees with comments made during the straw proposal meeting that the auction process for tie-breaking seems to introduce a lot of administrative burden that may be unnecessary. As an alternative, the CAISO could reduce the chance of ties by using a more granular scoring system such as the LSE interest component recommended by SCP. If a tie still exists, SCP believe it would be reasonable to study all tied projects unless they tie at zero (flagged as a potential situation by the CAISO), in which case it may be acceptable to not study any.

c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO.

SCP proposes replacing the 20-point letter of interest and the 50-point commercial readiness categories with a single 70-point score reflecting LSE interest following one of the methodologies described above in prompt 2a. As frequently discussed, it is unlikely a project in the interconnection queue will have a PPA, and using shortlisting status or a letter of interest is not binding, and can introduce opportunities for gaming.

SCP also encourages the CAISO to reconsider its decision to not include a resource diversity or long-lead time component to scoring. SCP disagrees with the CAISO’s conclusion that conformance with the IRP scenarios is inherent in the zonal approach. Although the zonal approach will provide geographic conformance, it does nothing to promote alignment with needed technologies. As acknowledged by the CAISO in its discussion of TPD, shorter cycle solar and storage projects can crowd out projects like offshore wind and geothermal that add diversity and important capabilities. Handling this issue at the TPD allocation step will not have any impact if these types of projects cannot enter the study queue. Specifically, SCP recommends that the CAISO include a 20-point adder for offshore wind and clean firm resources to enable them to compete on a more level playing field with projects that have an easier path to satisfying permitting scoring criteria.

SCP does agree with CAISO that providing higher scores for these types of projects may counteract the desire to promote resources that can satisfy mid-term reliability. An alternative may be to study 150% zonal capacity plus the MW of any long-term or diverse resources that is accepted in that zone. This allows the longer-term resources to progress through the study process and be considered for TPD allocation. It then gives the CAISO, developers, and LSEs information on the scope and cost of potential upgrades.

i. Please indicate interest in participating in a workgroup to refine scoring criteria. 

SCP has strong interest in participating in a working group to refine scoring criteria. 

d. Please provide feedback on auction design and use of auction revenues. 

?If an auction process is employed for tie-breaking, SCP agrees with the CAISO’s proposed structure. 

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

SCP appreciates the change to the Option B process allowing for LDNU costs to be recovered. This change is fair and will hopefully increase the viability of Option B for developers. SCP also recognizes the CAISO’s concern that a large use of Option B may lead to stranding of transmission built for the CPUC plan. To minimize this risk, it will be important for the CPUC’s plan to be responsive to Option B activity. It may be worth considering a scenario where an Option B project is later included in a CPUC portfolio after contracted by an LSE, and whether there should be a mechanism for changing the funding source of the ADNU or enabling cost recovery. 

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

SCP opposes the CAISO’s proposal to limit the eligibility of energy-only resources to group C. SCP is aware of many viable projects, including one under contract by SCP, that switched to energy-only instead of parking to enable negotiation of a generator interconnection agreement. To reach COD, these projects still require FCDS to fulfill contractual RA obligations despite their energy-only status. SCP appreciates the CAISO’s interest in forcing less viable projects out of the queue, but not if they are under contract with an LSE. The proposed time-in-queue restrictions are a fair way of forcing unviable projects out of the queue without purging projects that are energy-only out of necessity.

SCP supports the CAISO’s interest in reforming the TPD allocation. In general, SCP believes most reforms to the TPD allocation process should be aligned with the interconnection scoring criteria so that the projects that are prioritized for study are also the ones that get deliverability. The one big difference is that projects will have a better understanding of their network upgrade costs when seeking TPD and may have enough cost certainty to obtain an off-taker. Accordingly, it is likely sensible to include contracting status as a major criteria in TPD status. SCP also supports the idea of provisioning TPD for long-lead resources, but that change needs to be paired with giving long-lead resources weight in the study scoring as well so that they can enter the process.

SCP supports the CAISO’s interest in developing multi-year interim deliverability for projects awaiting LDNUs. Although the CAISO does not currently see any availability for ADNU interim deliverability, SCP would like the CAISO to consider opening-up the possibility of ADNU interim deliverability in case a situation arises where there is availability in the future. This could be a possibility if a large long-lead resource is allocated TPD associated with an ADNU, but a later queued project CODs earlier and provide deliverability before completion of the ADNU.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

SCP is supportive of the queue management elements of the straw proposal and appreciates the CAISO identifying a workable compromise by offering a one-time withdrawal opportunity and identifying opportunities to accelerate funding and construction of network upgrades.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

SCE supports the proposal to provide data to stakeholders to enable the zonal approach to interconnection.  The data, including heat maps, will be critical in attempting to steer resource developers to locations where there is current or planned transmission capacity.  Such explicit signals regarding available capacity before the submittal of interconnection requests should make for a more effective and efficient interconnection request intake process.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU.

As suggested in SCE’s proposed changes to CAISO scoring criteria (see response to question 2c below), one way to incorporate LSE interests is through the implementation of an LSE “Load Share Weighted LSE Bonus Point Scoring System” where for each preferred zone, LSEs are given a certain number of “bonus points” based on their load share (LSE Bonus). LSEs would allocate their “bonus points” for projects that they would like to enter into the study process, based on a LSE’s general interest of project characteristics (size, location, technology type, CPUC requirement, etc.) and/or specific commercial conversations that have been occurring between a LSE and the project. Further discussions would be needed during subgroup stakeholder meetings to determine how points would be allocated by the CAISO but key considerations of the bonus point system should include, but not be limited to: (1) maintaining equity among LSEs, (2) what type of data will be required from CAISO to enable LSE’s to allocate bonus points, (3) ensuring resource mix mirrors CPUC requirements or other non-jurisdictional LSE RFP requirements, and (4) workload considerations on both the LSE and CAISO.

In addition, CAISO should provide easy access and transparency of interconnection costs and interconnection facility upgrade costs as early as possible in the process to provide more certainty on costs that feed into the economic analysis of LSEs when determining whether or not to enter into PPAs.

b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements.

SCE sees the auction mechanism as a secondary tool to further reduce the number of projects to be studied in a preferred transmission zone. The auction mechanism is independent of the scoring system and as such SCE does not think there are, or should be, trade-offs between the two mechanisms. SCE favors not expanding the auction mechanism and believes the use of the auction should be minimized. 

SCE is open to the auction mechanism for projects above the 150% threshold proposed by the CAISO but opposes trade-offs between the scoring criteria and auction elements.

For reasons stated in previous comments, SCE remains opposed to implementing an auction as the primary screening mechanism because (1) it raises the potential of added cost of designing and holding an auction (and ultimate potential additional cost burden on transmission customers), (2) the potential of only “deep pocketed” developers being able to outbid less capitalized developers, (3) the potential creation of a secondary market for transmission capacity which is paid for by ratepayers, and (4) the potential of hoarding of transmission capacity by the successful bidders, which would result in the underutilization of existing capacity, an uneconomic outcome, and market power/gaming risk.

c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO.

SCE proposes to include the following revisions to CAISO’s proposed scoring matrix. Changes to CAISO’s proposal are highlighted in bold font and more details are provided for each scoring category revision immediately following the comparative tables below.

Highlight of SCE’s Changes to CAISO’s Straw Proposal Scoring Criteria

Highlight of SCE’s Changes to CAISO’s Straw Proposal Scoring Criteria

SCE’s Scoring Criteria Proposal:

1. Interest from off-taker [Select One, Max=50]:

1. LSE’s Selection [up to 50 points]

(An LSE is allocated a finite number of points based on load share)

OR

2. Contracting Status: Shortlisted (20), Preferred resource in an LRA-approved LSE’s resource plan (30) [CAISO to clarify this criterion in subgroups], Executed term sheet for a PPA (30), and Executed PPA 5yr + (if executed PPA remains included, must meet development posting criteria detailed below) (50) [Specific criteria for each category to be discussed and added during subgroup discussions]

2. Commercial Readiness [20]: long-lead items procurement [specific items to be discussed during subgroups]
3. Permitting Status [50]: Indication of community support (5), Application of land use permit (10), Initiation of CEQA review or application for AB 205 expedited environmental review of eligible projects filed (15), CUP granted (or demonstration of alternative permitting) (20)
4. Project Attributes [40]: Ability to provide Local RA in an LCRA with an ISO demonstrated need for additional capacity in that local area (20), Meets the requirements of a current CPUC procurement order or non-jurisdictional LSE’s RFP including online dates (20)
5. Project Location [30]: Energy community per IRA (10), in load pockets not needing ADNUs (20)
6. Expansion of an Operational Facility [50]: Expansion of an existing facility (25), Expansion of an existing facility where the existing gen-tie already has sufficient surplus capability to accommodate the additional resource (50)
7. Developer Viability [40]: – one project of similar technology and capacity in construction [20], one project of similar technology and capacity completed [40].

A.1—Interest from Off-taker, LSE Selection: Regarding how CAISO would award an LSE’s Selection points to projects, the specific methodology will need to be discussed during subgroup stakeholder meetings but, at a high level, SCE proposes that for each preferred zone, LSEs are given a certain number of “bonus points” based on their load share (LSE Bonus). LSEs then allocate their “bonus points” for projects that they would like to enter into the study process, based on (1) general interest of project characteristics (size, location, technology type, CPUC requirement, etc.) and/or (2) specific commercial conversations that have been occurring between LSEs and those projects.

A.2—Interest from Off-taker, Contracting Status: Regarding using an executed PPA as a criterion for commercial readiness, SCE continues to strongly oppose the CAISO including an executed PPA as a scoring criterion for a project to demonstrate commercial readiness in the prioritization to the study process.  CAISO retains in the Straw Proposal, without stakeholder consensus, an executed PPA as a potential means to demonstrate a project’s commercial viability.  In fact, most stakeholders oppose the retention of an executed PPA as a commercial viability criterion at the interconnection request stage and the CAISO agreed during the September 28 stakeholder call that it would be premature to expect a developer to have an executed PPA at such an early stage of project development. Magnifying SCE’s concern is the fact that an executed PPA makes up over 20% of the total points available within the CAISO straw proposal’s proposed scoring criteria.

SCE reiterates its concerns, submitted to the CAISO on August 15, regarding this topic on the potential for developers to “game” LSEs’ procurement processes by executing highly questionable PPAs (e.g., memorandum of understanding label as PPA) to simply increase their criteria viability score. 

At such an early phase (i.e., interconnection request intake) of a project’s overall development, an LSE would not have sufficient network upgrade costs and scheduled in-service date to execute a PPA.  Therefore, LSEs would be making procurement decisions on projects for which the costs and online dates are uncertain. If a PPA is required to enter the interconnection queue, the developers must make an estimate of what the Network Upgrade and Interconnection costs will be; these estimates feed into the economic analysis of each project’s impact to customer rates. Therefore, without certainty on the Network Upgrade and Interconnection costs, LSEs would be executing contracts based on an economic analysis that will most certainly change when resources obtain their LGIA. Along similar lines, with respect to projects’ online date, the developers will be making their best estimates of when their project can achieve commercial operation. However, it will not be until the CAISO and PTOs complete their studies that the developers will have a reasonable forecast of when they will achieve commercial operation.  Accordingly, the value of an executed PPA at this stage is diminished because it does not provide a sufficiently accurate reflection of a project’s viability or cost. Without such needed vital information, either developers will seek contracts that do not provide LSE customers protection on cost overruns or development delays, or LSEs execute contracts that will have a high likelihood of termination or renegotiation.

If CAISO includes a PPA as a scoring criterion despite stakeholders’ opposition, SCE proposes that the executed PPA viability points only be awarded for PPAs with a contractual provision that requires the seller to post, to the LSE, a minimum development security of $40/kW. This required development security would need to be posted prior to submitting the application and remain posted for the duration of the interconnection process for the PPA to be eligible to receive the allocated point in the category. Projects with executed PPAs that have not met this development security requirement would get 0 viability points.

B--Commercial Readiness: SCE believes commercial readiness is important and should factor critical commercial items, such as the procurement status of major equipment and other long-lead-time items (e.g., transformers). The details of what should be included in the commercial readiness criterion should be discussed in a sub-group.

D—Project Attributes: Regarding “Project Attributes,” if this criterion is adopted, SCE believes “ISO demonstrated need” is essential. SCE also believes that the project’s online date should be considered in conjunction with procurement orders.

G—Developer Viability SCE recommends that “Developer Viability/Experience” be added to the project scoring model.  Under a Developer Viability criterion, a project developer would be awarded points for having a project of similar technology and capacity either under construction or completed.

Other comments: Concerning the CAISO statement that “the ISO proposes to automatically include any project that a non-CPUC jurisdictional LSE demonstrates is a preferred resource in its resource plan that has been approved by its Local Regulatory Authority” (Straw Proposal, p. 26), SCE seeks clarification from the CAISO regarding under what assumptions these types of projects are deemed “most ready” to proceed to the interconnection request process.  This statement provides substantial preferential treatment to projects that meet the above criteria by essentially giving them different interconnection rules and in effect allowing them to bypass the interconnection application study selection process. SCE contends that this scenario falls under the contracting status of a project and therefore should be included in the “interest from off-taker, contracting status” section of the scoring criteria.

d. Please indicate interest in participating in a workgroup to refine scoring criteria.

SCE is very interested in participating in a subgroup to have continued discussions of the stakeholder proposals submitted, including SCE’s, to refine the scoring criteria.  At this point in the 2023 IPE initiative, the CAISO acknowledges that “several criteria may be improbable to expect before the study process”.  SCE supports the CAISO’s intent to continue to seek stakeholder comments, including via workgroup sessions, on the proposed scoring criteria which remain under development and in need of further revisions before a reasonable, effective, and workable scoring system can be implemented.

e. Please provide feedback on auction design and use of auction revenues.

SCE believes the auction designed by the CAISO can be an effective secondary screener when the viability scoring is unable to limit the proposed capacity to 150% of available capacity within each zone.  However, further refinements to the auction design should include measures to ensure that participants beyond well-financed, deep-pocketed developers will also benefit from participating in each auction.  A highly desirable outcome for any auction is for it to yield a diverse set of projects in terms of technology and size, among other potential attributes.  SCE supports the CAISO’s proposal that if a project withdraws, including withdrawal prior to reaching commercial operation, some or all the auction-posted security will be forfeited and used to offset and support still-needed network upgrades.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

SCE supports the proposal that projects seeking to interconnect in areas that have no available or planned TPD capacity are only eligible to select Option B.  SCE also supports the proposal for Option B projects to meet all requirements for submitting an interconnection request, including the information for project scoring.

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

a. TPD allocation

SCE supports the CAISO’s proposed approach to begin the development of a full TPD allocation proposal after details regarding the interconnection requests scoring criteria and the study process are finalized. This sequential method may benefit the development of modified criteria for the TPD allocation process based on what is ultimately adopted regarding criteria at the interconnection request intake juncture. As part of this two-step approach, SCE agrees with the CAISO’s proposal to limit the eligibility of Energy Only (EO) projects to seek an allocation of TPD to allocation Group C, for the capacity amount which the EO project has achieved operation.  This approach should help to reduce the number of low-viability EO projects (with no portion of the project having achieved commercial operation) lingering in the queue.

b. Interim Deliverability

SCE supports the CAISO continuing to explore with stakeholders in both 2023 IPE and Deliverability Assessment Methodology initiatives to develop a methodology where a multi-year interim deliverability allocation process could bridge the gap between the in-service date of an LDNU and the project’s requested COD.  However, as pointed out in SCE’s comments submitted to the CAISO on September 12, 2023, concerning “conditional deliverability” in the Generation Deliverability Assessment Methodology Straw Proposal, SCE would be concerned with the CAISO awarding interim deliverability without the existence of the required physical infrastructure (i.e., LDNUs) for an extended time period (i.e. multi-years) unless there is a reasonable degree of confidence that the generating unit will continue to provide reliability benefits during the interim period. Any interim deliverability proposal should not undermine the core structure of the Resource Adequacy process.  Thus, while some deliverability accommodations can and should be made, there must be a clear understanding of the reliability impacts of these accommodations.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects?

No, the one-time withdrawal opportunity does not sufficiently address the disproportionate burden placed on Participating TOs to fund still-needed network upgrades when developers that have project(s) that have lingered in the interconnection queue decide to exercise this option and withdraw their interconnection request or terminate their interconnection agreement.  If the straw proposal’s intent is that the developer and the Participating TO equitably share the burden to finance the cost for the still-needed network upgrades, then the CAISO proposal falls short.  In addition, the CAISO’s proposal does not take into consideration that the Participating TOs use of 50% of 30% IFS (i.e., the non-refundable portion of the 2^nd IFS posting requirement for network upgrades) funds may be treated as a contribution in aid of construction (CIAC) or income to the Participating TO, which is subject to tax at a rate of 24%.  This treatment is not different than as described in GIDAP Section 7.6(b) – Application of Non-Refundable Amounts.  If these funds are classified as a CIAC then the example provided in the 9/21/2023 straw proposal would be updated as follows:

Process Example:

• QXXX1 (the Project) is assigned Upgrade A
• Project posted 30% IFS = $1,000,000
• Project withdraws as part of this one-time opportunity
• Upgrade A is still needed for a same or later-queued project
• Up to 50% of 30% IFS (currently non-refundable) = $500,000
• The currently refundable portion ($500,000) is returned to the Project
• The Participating TO will use $500,000*(1 - .24) = $380,000, not $500,000
• Once the upgrade is placed in-service, the Participating TO will refund $380,000, not $500,000 in accordance with Article 11.4.1.1 of the LGIA

It is SCE’s position that the more effective tool CAISO is proposing to clear the interconnection queue of lingering projects is Section 5.6 – Viability Criteria and Time-in-Queue Limit of the 9/21/2023 straw proposal, which would require developers to execute LGIAs and/or UFAs, issue the NTP, and make their 3^rd IFS posting (100% of assigned costs) if they wish their projects to remain in the queue.  Otherwise, the developer’s projects will be withdrawn.  Under this scenario, the current withdrawal or termination-effect on financial security and application of non-refundable funds per GIDAP Section 11.4 and 7.6, respectively, would apply and the developer would forfeit the entire non-refundable portion of their network upgrade IFS, whether its 50% of 30% of the 2^nd IFS posting or 50% of 100% of the 3^rd IFS posting.   

If the CAISO is intent on proceeding with this two-prong approach, then the one-time withdrawal opportunity non-refundable portion to be used by the Participating TO should be based on the developer’s 3^rd IFS posting, 50% of 100% IFS*(1 - .24).  This is an equitable approach since the developer will recover this amount once the network upgrade is placed in service in accordance with 11.4.1.1 of the LGIA and/or UFA on top of the refundable portion of its 3^rd IFS posting.  Anything less would be inherently unreasonable and unfair to the Participating TO.    

b. Are the updates to the Limited Operation Study sufficient?

SCE supports the CAISO’s proposal to allow generators to request a Limited Operation Study (LOS) nine (9) months prior to the latest approved initial synchronization/trial operation date (date in the LGIA/UFA, approved MMA, PTO/Affected PTO Delay Notification, etc.) in the event the associated Participating TO’s Interconnection Facilities or Reliability Network Upgrades (RNUs) are not reasonably expected to be placed in-service prior to the generators latest approved commercial operation date (COD).  GIDAP Section 14.2.4.1 already contemplates that to the extent study assumptions change, the CAISO and Participating TO/Affected PTO will update the LOS results as needed.  A restudy would require a generator to comply with GIDAP Section 14.2.4.2, post the $10,000 deposit for the CAISO in coordination with the Participating TO/Affected PTO to perform the restudy and within the prescribed timelines.  SCE also supports CAISO proposal to clarify in its Generator Management Business Practice Manual (BPM) Section 8 the interaction between an MMA and LOS, especially if the LOS results are affected by a subsequently approved MMA.  

c. Comments on adding asynchronous generating facility requirements in the SGIA

SCE supports the CAISO’s proposal to make Attachment 7 – Interconnection Requirements for Asynchronous Generating Facilities to Appendix FF, the Small Generator Interconnection Agreement (SGIA), consistent with Appendix H to Appendix EE, the Large Generator Interconnection Agreement (LGIA) to standardize technical requirements, such as, but not limited to, voltage ride-through capability, power factor design, and transient data recording applicable to asynchronous generating facilities irrespective of MW size.

d. Comments on removal of suspension rights

SCE shares CAISO’s concern that with a move to a “first-ready, first-served” paradigm, developers may seek to exercise the suspension provision with more frequency, which will halt and place the entire project on hold for up to three (3) years (except shared Network Upgrades) if retained because they have a “not-ready” project.  SCE notes that developers have historically rarely invoked the current suspension provision (Article 5.16 of the LGIA), due in part to having the option to extend their project’s commercial operation date multiple times through the modification process (resulting in deferment of project payments, financial security, and milestones).  Therefore, SCE supports the CAISO’s proposal to remove suspension rights for all projects that have not executed a LGIA and, as applicable, its companion Upgrade Facilities Agreement (UFA) when SCE is the Affected Participating TO.  Per the “first-ready, first-served” paradigm, there should be no reason for a developer to suspend its project unless it’s a “not-ready” project.  Under this paradigm, a developer upon receiving its final interconnection study should be ready to proceed towards commercial operation by executing a LGIA, and, as applicable, its companion UFA, and post its Interconnection Financial Security (IFS), irrespective of whether the project is allocated TP Deliverability (FCDS or PCDS) or designated as Energy-Only after two (2) TP Deliverability Allocation Study cycles.   If not, and subject to FERC’s approval, the CAISO should update Appendix DD to its CAISO Tariff, BPMs, and add language to the LGIA that will give the CAISO and Participating TO/Affected PTO the authority to withdraw a project from the interconnection queue pre-LGIA or terminate a LGIA and its companion UFA, where applicable.  “Not-ready” projects should be immediately withdrawn from the interconnection queue or if an LGIA is in place, the LGIA and, as applicable, its companion UFA should be terminated.

The removal of the suspension provision will likely lead to more MMA COD extension requests pre and -post LGIA/UFA.  As a result, SCE recommends MMA COD extension only requests be fee-based, no less than $7,500.00.

If FERC approves the removal of suspension rights, SCE seeks clarification on such removal impact to Sections 8.9.2.2 and 8.9.2.3 of Appendix DD to the CAISO Tariff and Section 6.2.9.4.1 of the GIDAP BPM.  In addition, SCE notes that COD extensions through the modification process in which Network Upgrades are common to multiple generating facilities will require the developer to continue to maintain IFS and make project payments towards these shared Network Upgrades or the COD extension request will be denied.

  e. Comments on TPD Transferability proposal

SCE appreciates the CAISO’s proposal to withdraw projects from the queue upon the approval of a corresponding TPD transfer, given that, as CAISO points out, only one EO project has achieved COD in the past 8 years.  From a queue management perspective, this would be a straightforward approach to remove seemingly non-viable projects from the queue.  However, SCE cautions that there may be a need for a more balanced assessment of the prevailing situation relative to EO projects in the queue and encourages the CAISO to consider the projects through a procurement lens.  LSEs have executed contracts for EO projects to achieve Renewable Portfolio Standard (RPS) and clean energy goals.  Deeming an EO project as not commercially viable could result in fewer renewable resources and could increase the cost of clean energy. If a developer decides to transfer deliverability from a solar project to an energy storage project behind the same POI to meet the needs of an LSE, this should not automatically cause the solar project to be considered not viable or not needed by the system.  In such instances, the decision to transfer deliverability is based on the commercial needs of an LSE. SCE contends that the solar project is likely to still be needed and additional considerations should be factored in before the project is removed from the queue. Further, as evidenced by the Base Portfolio of the 2022-2023 TPP, there is the need to bring online approximately 12,500 MW (roughly 30% of a total of 40,200 MW in the Base Portfolio) of new renewable EO resources over the next ten years.

f. Comments on viability criteria and time-in-queue limit

SCE supports the CAISO proposal, consistent with Order 2023, to impose an unavoidable time-in-queue requirement for all projects without an executed LGIA and/or UFA to execute an interconnection agreement and provide the Notice to Proceed and the 3^rd IFS posting in accordance with the terms and conditions of the LGIA and/or UFA.

SCE strongly supports the CAISO’s proposal to have developer(s) with project(s) in study clusters up to queue cluster (QC) 12, inclusive, execute a LGIA and/or UFA no later than December 31, 2024, and QC 13 and QC 14 projects execute a LGIA and/or UFA no later than June 30, 2025, and December 31, 2025, respectively.  SCE also supports the CAISO’s proposed timelines included in the CAISO’s September 21 Straw Proposal presentation to require developer(s) with pre-QC15 project(s) that completed their interconnection studies to execute a LGIA and/or UFA and provide the NTP and the 3^rd IFS posting if it desires to remain in the interconnection queue or its project will be withdrawn.  

SCE notes that pre-QC14 projects that have an executed LGIA and/or UFA that have not provided the NTP and the 3^rd IFS posting in accordance with the terms and conditions of the LGIA and/or UFA are in breach of the agreement. If the breach is not cured within the prescribed timelines in the agreement, the Participating TO/Affected PTO and the CAISO should take steps to terminate the agreement to clear the interconnection queue of projects that linger without advancing towards commercial operation.

 g. Comments on project Modification updates

SCE agrees with the other IOUs that all MMA requests must continue to be formally documented and properly evaluated to ensure the safety and reliability of the system and require developers to limit the number of modification requests by consolidating multiple changes in one MMA submittal (e.g., storage addition, inverter manufacturer/# of inverters, phasing, gen-tie route, and COD extensions in lieu of separate submittals), which will save all parties time and resources.  COD MMA extensions should only be fee-based, with a fee no less than $7,500.00 pre or post LGIA/UFA.  SCE supports increasing the time to complete engineering analysis from 45 calendar days to 60 calendar days from when the modification submittal is deemed complete (all deficiencies cured); and increase the time to complete a Facilities Reassessment Report (FRR) from 45 calendar days to 60 calendar days.  SCE also supports the CAISO’s proposal regarding increased coordination amongst the CAISO, the Participating TO/Affected PTO, and the developer to enhance the overall modification processes.  The Participating TO/Affected PTO should be given the authority by tariff to charge its time to amend an LGIA/UFA as a result of an approved modification request, which is a significant and time-consuming endeavor.  SCE recommends increasing the MMA deposit to $37,500, not $30,000 to cover the costs of amending a LGIA/UFA.  

h. Comments on postings for shared network upgrades

SCE supports the CAISO proposal that once the developer for the first project provides the Notice to Proceed in accordance with the LGIA, then the CAISO in coordination with the Participating TO will officially notify all the other developers whose projects were allocated a pro-rata share of the same shared network upgrade that they will be required to make the 3^rd Interconnection Financial Security (IFS) posting for their pro-rata share of the shared network upgrade regardless of their deliverability status or whether they have an executed LGIA.  However, CAISO’s proposal does not go far enough without providing clarification.  IFS is not the same as receiving project payments from the other developer(s) to fund, design, engineer, procure, and construct the shared network upgrade.  Thus, SCE seeks CAISO’s clarification on the following:

1. Will the Participating TO be permitted to sweep the 3^rd IFS instrument(s) from the other developers to fund the balance of the shared network upgrade and once the shared network upgrade is placed in service, the shared network upgrade cost will be refunded to all parties in accordance with the Appendix DD to the CAISO Tariff and the terms in the LGIA, assuming the other developer(s) execute a LGIA? or,
2. Will the developer of the first project be required to advance the balance of the shared network upgrade costs by executing an amendment to its LGIA or executing a Letter Agreement in accordance with Section 12 of Appendix DD to the CAISO Tariff knowing that the Participating TO is holding the 3^rd IFS Posting from each of the other developer(s) for the balance of the shared network upgrade?  Once the shared network upgrade is placed in service, will the Participating TO be able to sweep the collateral instrument(s) and remit the funds immediately to the developer of the first project while the assigned pro-rata share cost of the shared network upgrade will be refunded in accordance with GIDAP and the terms in the LGIA, assuming the other developer(s) execute a LGIA? or,
3. Is CAISO expecting the Participating TO to fund the balance of the shared network upgrade knowing that the Participating TO is holding the 3^rd IFS posting from the other developer(s) for their pro-rata share of the shared network upgrade?  If so, SCE would strongly oppose CAISO’s position to have Participating TOs finance upfront the balance of the shared network upgrade costs.
4. What happens to the 3^rd IFS posting from the other developer(s) for their pro-rata share if they do not execute an LGIA requiring them to make project payments toward the shared network upgrade?

i. Comments on timing of incorporating MMAs into the GIA

SCE opposes the CAISO’s position on timing of LGIA and/or UFA amendments to incorporate modification results for the following reasons:

1. The controlling document from a project implementation/execution perspective is not the MMA reports but rather the LGIA and/or UFA, which address the project’s scope of work, costs, project payments, milestones, and overall schedule.  
2. Waiting to amend the LGIA and/or UFA until a point in time near to when a developer’s project synchronizes to the CAISO Controlled Grid to incorporate all approved MMAs is impractical and would create confusion relative to the scope of work, schedule, and the project’s overall budget.
   1. SCE’s contract execution team relies on a project summary based on the controlling LGIA and/or UFA, not subsequent modification results.
   2. There have been cases where subsequent modification results cancel prior approved project modifications, which causes tracking difficulty and leads to confusion during project implementation.
3. Most approved modification requests trigger changes to scope, cost, and schedule or a combination thereof, which would require an immediate amendment to the LGIA and/or UFA.  
4. SCE as a Participating TO opposes being required to finance cost associated with incremental scope triggered by a developer’s request to make modification(s) to its project.  Accordingly, SCE would oppose any delay in amending the LGIA and/or UFA to collect additional project payments and financial security (ITCC and IFS) that is outlined in an MMA/Facilities Reassessment Report.  
5. COD MMA extensions also trigger significant changes to the LGIA and/or UFA that must be captured immediately in an amendment, such as deferment of project payments, updating costs, changes to financial security amounts (ITCC and IFS) and their due dates, and schedule (i.e., recalibration of milestone due dates based on the revised COD).  
6. Finally, if CAISO has insufficient staffing levels, they should strongly consider limiting the number of MMA submittals by a developer post LGIA and/or UFA as stated in Section G above to save time and resources.  

j. Comments on timing on starting network upgrades

SCE supports CAISO’s proposal for the LGIA and/or UFA to include specific dates for the developer to provide the notice to proceed (NTP) and the 3^rd IFS posting for the following reasons:

1. SCE already provides specific milestones and due dates in its LGIA/UFA Appendix B, Milestone table with respect to notice to proceed (NTP) for design, engineering, procurement, and construction of Participating TO Interconnection Facilities, Network Upgrades, and Distribution Upgrades, if applicable in accordance with Article 5.5.2 of the LGIA and/or UFA.  
2. SCE also includes separate and distinct milestones and due dates regarding the 3^rd IFS posting pursuant to Article 11.5 of the LGIA and/or UFA, which aligns with the start of Construction Activities, a defined term.
3. SCE also provides notification of the start of construction for PTO Interconnection Facilities, Network Upgrades, and Distribution Upgrades pursuant to Article 5.6.2 of the LGIA and /or UFA.  
4. SCE will ensure that these milestone(s) and due dates are applied consistently to all LGIAs and UFAs.  
5. SCE agrees with the CAISO that if an MMA modifies the NTP dates, these dates will be included in the MMA report and in an amendment to the LGIA and/or UFA.
6. SCE has also streamlined its internal processes to assign resources and initiate a project with a developer within a couple months of executing the LGIA or UFA in order to reasonably target the completion of Participating TO Interconnection Facilities, Network Upgrades, and Distribution Upgrades, if applicable in advance of the approved In-Service Date in the LGIA or Initial Synchronization/Trial Operation Date in the UFA when SCE is the Affected PTO.
7. SCE’s Major Projects Organization (MPO) during its implementation meetings provides transparency and open communication with developers to review, track, and adjust milestones as dictated during this phase of the project life cycle in compliance with the terms and conditions of the LGIA and/or UFA.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

Strata believes that the FERC Order 2023 and the pro-forma LGIP can achieve meaningful reform in the CAISO interconnection queue without bringing in the proposed added TPD allocation and auction procedures.  Key advancements in Site Control and Commercial Readiness proposed in the FERC pro-forma LGIP should be utilized first before larger changes are brought forward to the interconnection process. The larger financial committments required to enter the queue and potentially withdraw from the queue will limit interconnection requests to a viable projects. Strata believes the proposed base pro-forma LGIP reforms will successfully solve the CAISO interconnection extreme overflow issue while keeping the queues full enough to meet the capacity challenges of the system.  

CAISO shared some interesting proposals around connecting the TPD Allocation process and the generator interconnection process.  This is a novel concept but should be pursued through transmission planning reforms instead of generation interconnection. The TPD allocation and more transparent planning about where deliverability is available is meaningful to inform but not limit the interconnection process. Sharing more information around TPD allocation and building the heatmaps are excellent steps that should be implemented to inform stakeholders.  These are best practices that could spread to other markets. 

Strata opposes limiting Energy Only projects to Allocation Group C.  These are viable projects that would have to potentially exit the queue.  Instead, CAISO should allow these projects to have future flexibility if transmission capacity is constructed.  

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements

The FERC pro-forma LGIP requirements should be blended with certain elements from the CAISO project scoring proposal to form the basis of Commercial Readiness in CAISO.  Numeric scoring of projects and capping queues based on the receiving TPD results should be eliminated.  Instead, CAISO should allow viable projects that meet site Contorl and Commercial Readiness to proceed if the customer is willing to post the necessary deposits as outlined in the FERC pro-forma LGIP.  

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

No comments

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

Strata does not support CAISO’s modifications to Transmission Plan Deliverability (TPD).  Modifications to the TPD process should be pursued separately from generator interconnection.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

e. Comments on TPD Transferability proposal

Strata supports keeping the ability to transfer deliverability.  Transferring deliverability is another mechanism to bring viable resources online in certain situations.  Transferring deliverability should be kept and other measures like implementing Site Control, Commercial Readiness, and Withdrawal Penalties should instead be used to help control queue volume.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

Terra-Gen appreciates the opportunity to comment and provide feedback on the CAISO’s IPE 2023 Track 2 Straw Proposal (Proposal).

Terra-Gen recommends that CAISO provide zonal data in a clearly understandable format and consistent approach for all zones. Zonal transmission availability information should be provided at least 6 months before opening of each Interconnection Request application window. Earlier contracting and other activities for both LSEs and developers would be facilitated if this initial information could contain estimates of upgrade costs and Commercial Operation Date (COD) timing.

Terra-Gen believes that it will be vital for CAISO to provide clearly defined zonal boundaries in an understandable and transparent format for all interested parties to understand the boundaries.  Since it is key to understand whether a project is located within or outside the zonal boundaries and the State agencies and CAISO want to encourage projects to be located within the zones, CAISO must provide that guidance, and provide it far enough in advance to inform interconnection activities.

Terra-Gen requests that CAISO consider clarifying the meaning of “available transmission capacity” and clearly document how the “150% zonal cap” figure would be determined. Terra-Gen observes there is no simple number for zonal capacity.

• Some aspects that demonstrate this complexity include the following considerations: Capacity is usually defined per transmission constraint, i.e., generation-pockets or 5% circle. Gen-pockets may partially overlap, lay inside a zone, or cross the zone boundary. Within the same generation-pocket, different POI have different impacts (shift factors on the transmission constraint).
  • Not every substation inside a zero-capacity zone has zero deliverability. CAISO should clarify if it plans to apply an artificial capacity limit for POIs without any known constraints or not.

Terra-Gen believes that CAISO should raise the proposed zonal cap to at least 200% to account for the approximations, interactive effects, and uncertainties noted above.

Terra-Gen requests that CAISO provide clarification that the transmission upgrades approved in the 2022-2023 Transmission Plan will be used for both defining the zones and their “available transmission” for Cluster 15 and the upcoming Transmission Plan Deliverability (TPD) Allocation process. Ongoing consideration of potential changes to reform CAISO’s Deliverability Assessment Methodology would also add more available transmission capability, and more capacity could be available for future TPD allocations.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU.

Terra-Gen has concerns regarding this aspect of the CAISO Proposal to further rely on LSE interest to limit interconnection request intake.  It is unclear how LSEs would appropriately evaluate projects earlier in the process without better advanced cost and timing information. Relying upon LSE interest earlier in the process may also result in concerns about potential gaming or create poor incentives to artificially garner LSE support for certain projects without providing actual benefits to achieving CAISO objectives and state policy goals. Additionally, the existing CPUC Integrated Resource Planning (IRP) process already incorporates LSE resource planning and resource bus-bar mapping that currently supports the objectives of the MOU.

b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements.

Terra-Gen opposes the auction mechanism aspect of the CAISO Proposal. There has not been a strong level of support or stakeholder consensus on this aspect of the Proposal, with some stakeholders expressing opposition to the concept provided in prior feedback.

Terra-Gen believes an auction mechanism would add complexity and administrative burden to the process and may be an aspect that may not often be triggered. The inclusion of an auction mechanism with the proposed reimbursement mechanism creates poor incentives to bid excessively to secure study of projects. This approach of employing an auction mechanism with reimbursement after COD unreasonably favors larger developers with the capability to tie up additional capital during the reimbursement timeframe.  It is also difficult to develop bid prices to support the proposed auction mechanism. Should CAISO continue to propose an auction mechanism for instances of ties in scoring criteria, it should also provide a review of the proposal by an economic consultant that specializes in auction design to provide guidance and recommendations on efficient auction design.  CAISO’s auction example includes a limited scenario, and the review of an external economist would be helpful to support developing the proposal and address more complex scenarios and auction outcomes.

Terra-Gen believes that the scoring criteria aspect of the proposal should be carefully considered. Terra-Gen recommends CAISO also consider other options to solve instances of ties among projects besides the use of an auction mechanism. To support open access principles Terra-Gen suggests that, in the case of ties in scoring criteria, CAISO may need to propose to simply allow tied projects to exceed the 150% zonal cap and still be accepted for study. It is also possible that ties among project scoring criteria would be uncommon if CAISO is able to formulate nuanced and more granular scoring criteria to differentiate projects.

c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO.

Terra-Gen supports the CAISO’s Proposal concept for applying scoring criteria to evaluate the readiness of projects (either for interconnection study and/or TPD allocation) and provide for appropriate distinction for the rationing of resources for interconnection study and completion. Terra-Gen believes that many of the CAISO’s proposed scoring criteria support a “first-ready first-served” approach to interconnection and suggests that CAISO should also seek to align the TPD allocation process with the proposed scoring criteria approach.

Terra-Gen suggests that some of the proposed scoring criteria appear to be duplicative, as follows:

• Both LSE interest and the specific “commercial readiness” criteria reflect LSE interest.
• The “project attributes” and “project location” definitions both address locational attributes.

Terra-Gen believes the Site Control/Site Exclusivity verification process could be facilitated using standard MW/acre range assumptions for different technologies. Terra-Gen also recommends that CAISO provide developers with the ability to demonstrate why land below those ranges is reasonable in specific circumstances.

i. Please indicate interest in participating in a workgroup to refine scoring criteria.

Terra-Gen would like to participate in any scoring criteria workgroup.

d. Please provide feedback on auction design and use of auction revenues.

Terra-Gen opposes the proposed auction mechanism as described above.

Terra-Gen comments on other issues not included by CAISO in the straw proposal comment template:

Cluster 15 process clarifications:  CAISO should clarify how it intends to apply aspects of its Proposal with respect to Cluster 15 on the following items:

• Which Order 2023 provisions will apply to these already-submitted IRs, e.g., Site Control.  This clarification should be provided as early as possible and CAISO should not wait until its December compliance filing.
• How does CAISO intend to apply its stated preference to apply the viability screening criteria before continuing the validation process, given C15 opportunities to modify projects when the process resumes in April-May, and the September 2024 validation deadline.

25% developer limit: Terra-Gen opposes this aspect of the Proposal and recommends CAISO remove the 25% developer limit. CAISO has not provided adequate justification for the proposed cap and the proposal does not provide differentiation between concerns in specific areas and applications spread throughout the system. CAISO should provide evidence that this had resulted in excessive speculative request submissions or provide other supporting justification for the need for such a cap.

Non-CPUC-jurisdictional LSE commitment preferences:  CAISO’s Proposal would allow specific resources in regulator-approved resource plans for non-CPUC jurisdictional entities to automatically qualify for study outside the points system, with their capacity subtracted from the available amount in the applicable transmission zones. Terra-Gen agrees with objections to this aspect of the CAISO Proposal raised during the 9/28 stakeholder meeting. Because CPUC-jurisdictional LSEs may also have resource plans with specific projects; in general, all projects should be subject to the points-system evaluation.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

Terra-Gen supports the CAISO’s Proposal that projects filing interconnection requests outside of priority transmission zones be placed into Option B, and that such projects must finance all assigned network upgrades without cash reimbursement.

Because these projects will not receive reimbursement for network upgrades, Terra-Gen requests further details be provided regarding CAISO’s proposal to potentially require a minimum viability score to be studied and does not take a position on the need to apply a minimum scoring for Option B projects at this time. Stakeholders should be provided with a straw proposal for the potential score threshold that CAISO has in mind to inform their positions on this aspect of the Proposal.  

Terra-Gen believes that projects located in the designated transmission zones should be allowed to elect Option B if they are not selected in the viability scoring selection process or do not receive a TPD allocation. Developers should have the option to self-finance additional transmission in the transmission zones if they believe their projects will still be viable and cost effective under self-funded network upgrades. 

Regardless of project locations, Terra-Gen recommends that Option B projects should be relieved of financial responsibility if the upgrade is later approved in the TPP, or other means.

Terra-Gen suggests that CAISO should assist with implementing financing of Option B projects. CAISO could consider providing MT-CRR revenue estimates so potential Option B sponsors can better understand the net costs of required upgrades.

Terra-Gen recommends that CAISO propose provide reimbursement for all, or portions of Option B self-funded upgrades, if CAISO or others demonstrate benefits to the system, e.g., deliverability for future projects in that area, or reliability improvements.

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

a. TPD allocation

Terra-Gen recommends that CAISO consider providing additional clarity on the upgrades needed for Full Capacity Deliverability (FCDS) or Partial Capacity Deliverability Status (PCDS) when a project receives TPD allocation. Terra-Gen also reiterates its comments noted above supporting applying a similar scoring criterion proposed for prioritization of interconnection applications or studies to the TPD allocation process to align the scoring criteria for both processes. Terra-Gen also supports updating the interim deliverability process to augment the amount and duration of Interim Deliverability Status (IDS) allocations.

b. Interim Deliverability

Terra-Gen supports the CAISO’s commitment that “The ISO will continue to work with stakeholders in both the IPE initiative and the Deliverability Assessment Methodology initiative to construct a methodology where a multi-year interim deliverability allocation process could bridge the gap between the in-service date of a Local Delivery Network Upgrades (LDNU) and the project's requested COD.”[1] While Terra-Gen is supportive of this concept generally, CAISO has not yet provided a comprehensive proposal to address the stated concerns that have been expressed in feedback in each stakeholder initiative. Terra-Gen believes there needs to be an approach that will prevent developers from having to postpone their CODs to avoid risks from long-lead-time upgrades delaying FCDS/PCDS.

CAISO has also reiterated that it will consider multi-year interim deliverability and hopes to address the stated concerns, but a fully developed proposal has not been advanced in either stakeholder venue. CAISO’s Proposal aspect for interim deliverability states: “This is a new form of multi-year interim deliverability that would allow a project to seek a TPD allocation earlier in its development process. The ISO believes that more time and stakeholder discussion are necessary to consider the various complexities of this new provision.”[2] Terra-Gen supports this position and believes this aspect is vital to advance in greater detail in upcoming iterations of the initiative. CAISO should provide more clarity on the concepts of interim deliverability and conditional deliverability and how these interrelated concepts interact. CAISO should provide an example(s) to demonstrate the intended implementation of the proposal for conditional deliverability and how it would interact with the current Proposal element for interim deliverability.

[1] CAISO 2023 IPE Track 2 Straw Proposal, pg. 41.

[2] Id.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects?

Terra-Gen supports the concept of a one-time withdrawal opportunity and cost assignment, however, it is important to reiterate the CAISO’s concerns that the timing and mechanics of this aspect of the Proposal may not sufficiently incentivize projects to withdraw, whereas more immediate and full refunds would have a better chance at achieving greater queue management effects.

b. Are the updates to the Limited Operation Study sufficient?

No comment

c. Comments on adding asynchronous generating facility requirements in the SGIA

No comment

d. Comments on removal of suspension rights

Terra-Gen opposes this aspect of the CAISO Proposal. CAISO has stated that the option for suspension is not often utilized but has not demonstrated any harm from retaining this option. Terra-Gen believes this aspect would be contrary to existing FERC directives. Specifically, FERC Order No. 2003 allowed generators to suspend work on Interconnection Facilities or Network Upgrades for up to three years for any reason.

e. Comments on TPD Transferability proposal

Terra-Gen opposes CAISO’s Proposal to withdraw or downsize a project that transfers its TPD allocation to another project.  Project off-takers often require project attributes in PPAs that could require developers to transfer TPD allocation within their own projects to fulfill the PPA requirements. At minimum, CAISO should not deem projects withdrawn if TPD allocation transfers within the same developer’s projects.

Terra-Gen appreciates the CAISO’s clarification that it would not require downsizing of projects with transfers of deliverability among queue positions owned by the same company and interconnecting at the same point of interconnection and may need to request a transfer between those positions to maintain viability and commercial or power purchase agreement status. Terra-Gen opposes the CAISO’s Proposal to require PPA documentation to support such transfer requests because commercial entities may have numerous other business interests and financing drivers that could also give rise to the need to transfer deliverability among queue positions at the same point of interconnection and a PPA requirement should not be the only valid reason for allowing deliverability transfers.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

Shell Energy North America (US), L.P.

 Suite 100

San Diego, CA 92121

Tel 1+ 858-526-2109

      www.shell.com/us/energy

10/12/2023

California ISO

Interconnection Process Enhancements Initiative

Track 2

            Re:  Comments of the Shell Companies on CAISO Track 2 Straw Proposal

Shell Energy North America (US), L.P. (“Shell Energy”), Shell New Energies US, LLC (“Shell New Energies US), and Savion, LLC (“Savion”) (collectively, the “Shell Companies”) offer the following comments on California ISO’s (“CAISO”) Track 2 Straw Proposal dated September 21, 2023 (the “Track 2 Proposal”), in its 2023 Interconnection Process Enhancements Initiative (“IPE”).  CAISO has engaged in a thoughtful and detailed process with stakeholders to develop new interconnection rules that complement the requirements of FERC No. Order 2023 and address the unique challenges and policy goals of California.  The Track 2 Proposals presents several innovative approaches to resolving the challenge of improving the interconnection queue process.  Overall, CAISO seeks to balance open access requirements with the goal of prioritizing projects that are “most ready” and have policy and customer support – Shell Energy believes the Track 2 Proposal represents a good start toward achieving these goals but will require further refinement and some modifications for the appropriate balance to be achieved. 

1. Interconnection Request Intake – The Zonal Approach

The heart and soul of the Track 2 proposal is the zonal approach.  It prioritizes projects that seek to utilize available capacity and are in zones where there are planned capacity additions approved by the CAISO for the Transmission Planning Process (“TPP”), as established in state and local regulatory resource planning portfolios.  This approach allows for better alignment of the resource procurement needs identified by the California Public Utilities Commission (“CPUC”) and the California Energy Commission (“CEC”) and the interconnection process administered by the CAISO.  The process revolves around developers acquiring available transmission plan deliverability (“TPD”) within the transmission zones.  Those that do not obtain TPD under the process outlined in The Track 2 Proposal must follow a process described for Option B projects.

The Track 2 Proposal goes beyond the requirements of FERC Order No. 2023.  It does so by creating a process that encourages resources to interconnect using available transmission capacity in priority zones defined by the TPP.  The Shell Companies support this approach as it provides a coordinated framework for the integration of new resources in priority locations.  CAISO asserts the reformed structure is needed to advance viable projects and prevent stagnant or unviable projects from hindering the progress of viable projects in the queue.  The Track 2 Proposal does this more aggressively than FERC’s approach contained in FERC Order No. 2023 but needs to be clarified with respect to the way it treats exiting projects currently in the queue, especially with respect to Cluster 15.

CAISO has stated Cluster 15 will be subject to the provisions outlined in CAISO’s forthcoming FERC Order No. 2023 compliance filing, assuming FERC ultimately approves the filing.  The Shell Companies understand Cluster 15 will be administered as the “transitional cluster study” as outlined in FERC Order No. 2023 but request clarification from CAISO.  In addition, because Cluster 15 was open for a period during April 2023, which predates FERC Order No. 2023 by some three months and a compliance filing to implement the Order has not yet been made or accepted by FERC, the Shell Companies request the CAISO offer interconnection customers the ability to make reasonable modifications to their interconnection request parameters for projects entered in Cluster 15.  For example, an interconnection customer may have queued a project in Cluster 15 which electrically interconnects to a location outside the ‘zones’ identified in the Track 2 Proposal.  The customer may wish to reconsider project parameters or interconnection location given the proposals contained in the IPE Track 2 process.  Allowing reasonable adjustments to project parameters once the rules for Cluster 15 are finalized is reasonable given the investments interconnection customers have made to participate in that cluster.   

The Option B process provides an alternative for projects that do not secure available TPD in a priority zone.  It appears that the process has more stringent requirements than those contained in FERC Order No. 2023.  These projects should be subject to the Order 2023 requirements, not ones that are more stringent.  There are projects, such as projects considering interconnecting from outside CAISO that may be more viable and offer more benefits than in-state priority zone projects and they should not be disadvantaged.  NCPA raised similar concerns and it does not seem that they have been adequately addressed.

2. Interconnection Request Requirements and Review

CAISO’ proposed interconnection requirements include elements of FERC Order No. 2023 and unique proposals designed to support the implementation of its IPE.  The Shell Companies support the CAISO proposals in the following section but note they require additional clarification and adjustments to move froward.    

1. Site Control and Entry Fees and Deposits

The Shell Companies support CAISO’s Track 2 proposal for site control and entry fees as they adopt FERC Order No. 2023 requirements.  However, CAISO also proposes an exception for Option B proposals that proposes a minimum viability score for such projects to enter a queue.  This raises concerns with respect to open access requirements as it goes beyond what is required under FERC Order No. 2023.  CAISO should adopt a minimum viability score for these interconnection requests based on criteria that include customer interest, but the weighting should be calibrated recognizing that since these projects are outside priority zones, they may represent merchant development opportunities.  These requests are typically submitted in the very early stage of project development and denying access before there has been a meaningful opportunity to develop a project’s potential does not make sense.  A reasonable standard for evaluating the ability of these projects to remain in the queue would be a better approach.  It would better balance open access rights with the concern that queues become unmanageable.  Also, the criteria for assessing the minimum viability at such early stages would require a very subjective analysis and potentially eliminate projects that could ultimately have high value for the state.    

2. Limits on size of Interconnection Requests

The proposal includes a requirement which limits the scope of requests a developer or company could submit in any given cluster window to 25% of the available transmission MW capacity across the CAISO footprint for that cluster.  The Shell Companies support the concept that there should be some limit on the ability of one developer to capture a significant share of available transmission capacity.  However, the ISO’s proposal maybe too restrictive if applied without consideration of the circumstances around a cluster.  For example, what if a cluster defined by available transmission capacity is relatively small, say 400 MW.  This would dictate the size of projects developers could offer potentially foreclosing more efficient, larger projects, e.g. 100 MW or larger projects.  It seems CAISO should consider a more flexible requirement that addresses the valid concern raised in this section.  For small zones in the above 400 MW example, in this case the CAISO could limit a developer to submission of a single interconnection request per zone in cases where the developer’s interconnection request exceeds 25% of the available transmission in the zone.

3. Prioritization of Long Lead-Time Resources Specific to Resource Planning Portfolios

The Track 2 Proposal attempts to address unique circumstances where sufficient transmission capacity must be reserved to support a project with a specific technology and long lead times that the CPUC decides should be part of the state’s portfolio of generating assets.  An example of this type of project is offshore wind designated by the CPUC in Northern California.  In Shell’s experience, as an organization involved with the development of offshore wind projects throughout the world and on the Atlantic Coast of the United States, it is important that the IPE recognize the unique challenges associated with the development of offshore wind resources, especially the longer lead time needed for the development of this technology due to the unique issues it faces in the permitting process and technology development and the more recent headwinds offshore wind developers are facing with supply chain disruptions and inflation impacting project cost and timing.

It is difficult to provide feedback on how this issue is addressed since CAISO proposes to address this after the rules for scoring criteria and the zonal study process are determined.    Withholding transmission capacity that could be made available for other near-term projects prematurely would be harmful to efforts to improve the coordination of resource integration.  The Shell Companies’ experience has been that coordination with competing offshore wind projects for long-term development has been the main challenge.  This should be informed by interconnection, permitting, and other issue that impact offshore wind development.  It appears that the State of California may centrally-procure offshore wind pursuant to AB1373.  Concrete actions in connection with this law may allow the CAISO to commit transmission capacity to accommodate offshore wind with a reasonable degree of certainty.  As the plan is defined, the CAISO could then develop and apply standards for assessing project viability so that transmission capacity can be ’reserved’ for future offshore wind.  These projects tend to be larger than onshore projects, so the electric grid impacts tend to be more significant and associated networks upgrades more substantial.  As a result, it is critical that moving forward with their inclusion in the interconnection process be transparent and deliberate.

4. Scoring Criteria for Prioritization of the Study Process

The Shell Companies appreciate the efforts of stakeholders and the CAISO to develop scoring criteria to prioritize projects that may enter the study process.  There should be some level of screening for this as recent history has demonstrated the queue has become unmanageable.   Also, this requires developers to demonstrate some level of due diligence to move their projects forward but adding too many requirements that are difficult to validate could discourage project development and cause good projects to never achieve commercial operation.  On page 25 of the Proposal, CAISO sets out the scoring system that will define project priority.  Some of these criteria are useful but others are too vague and would be subjective for CAISO staff to validate.  The two items that raise the most concern is “interest from offtakers”, and under the commercial readiness item, “shortlisted with California LSE or eligible commercial offtaker.”   The Shell Companies understand that such arrangements can be indicative of financial viability.  A bi-lateral contract with a creditworthy entity is an important if not necessary feature of project development in CAISO.  The problem is that at such an early stage they carry little practical significance and require significant judgement to be exercised in terms of understanding the nature of the commitment from the offtaker.  These items should be eliminated from the Task 2 Proposal.

However, if an offtaker commitment is included in the scoring, the Shell Companies suggest that the potential points a developer can receive be at or below what is proposed and that more than a letter of intent be the basis for awarding any points.  There should be a power purchase agreement that has firm commitments, backed with financial consequences with conditions precedent that are easily verifiable and meaningful financial penalties for withdrawing from the project.

Under the project attributes heading, there is an item referencing meeting the requirements of a current CPUC procurement or non-jurisdictional LSE’s Request for Proposals.  This type of more generic requirement could be applied but the criteria must be simple, for ease of validation.  In addition, the requirements necessitate the CPUC procurement orders or non-jurisdictional LSE’s RFPs requirement to be sufficiently clear so that the validation can occur.  The best approach maybe that the developer demonstrate that its project is in response to an RFP or procurement process so that all CAISO staff must do is determine that the procurement or RFP exists.  A process that requires CAISO personnel to engage in significant project due diligence and form opinions about a project’s viability at this early stage will consume ISO resources and probably not produce accurate results given the early stages of these projects.  

With respect to the other criteria, the proposed scoring system should also reward developers that achieved 100% site control of not only the project site but real-estate necessary to site the generation interconnection facilities.  Also, the Shell Companies support the proposal to convene a subgroup of stakeholders with experts on projects development and contracting to define clear and easily verifiable criteria.  In addition, the backstop of an auction as the CAISO proposes will be the ultimate filter.

3. Zonal Auction Proposal

       The Shell Companies support CAISO’s proposal to continue discussions with respect to the development of the auction proposal.  While it is not entirely consistent with the proposal the Shell Companies presented earlier, the process of defining priority zones and available transmission capacity for allocation via a “most ready” screening process and ultimately an auction, if necessary, offers a practical approach to managing the queue.  The Shell Companies offer the following specific comments:

1.  CAISO maintains that 150% of available capacity should be the quantity of available     capacity made available for each zone.  The CAISO recognizes the limitations of such a proposal in that investments will be “lumpy” and one project could consume all of the available capacity.  At this stage of its development, CAISO should consider a 150% threshold but develop a cost-benefit analysis that would allow CAISO to exceed that threshold in the awards associated with an auction.  Efficiency gains might be lost with a hard and fast application of the 150% rule;

2. The Shell Companies support a market-clearing, sealed-bid approach based on dollars per MW bids for the auction;

3. The development of project viability scores and thresholds for exempting eligible projects from auctions needs additional consideration.  The concept makes sense where the viability of one project versus another at such an early stage is easily determined but introducing too much analytical and subjective judgement activity into the process may hurt its credibility;    

4. CAISO has addressed the issue of increasing costs to customers associated with a pure auction-based process by structuring the bids as at-risk auction financial security bids that, if accepted, are refunded to the transmission customer once the project achieves commercial operation.  Thus, the proposal basically uses the bidding process to prioritize projects willing to offer the most financial security to move forward.  This proposal strikes a reasonable balance between imposing incremental costs on customers and utilizing an auction mechanism to allocate the scarce resource of transmission capacity; and

5. The financial consequences associated with a withdrawal of a project that was selected in an auction needs to be determined.  The Shell Companies recommend that stakeholder work with the CAISO to develop withdrawal rules for interconnection customers selected in an auction similar to those under FERC Order No. 2023.

4. One-time and Option B Withdrawal Penalties

On page 8 of the Track 2 Proposal, after referencing the large increase in the number of projects in the queue pre-Cluster 15, CAISO states, “[t]he ISO needs a significantly reformed structure to advance viable projects and prevent stagnant projects from hindering the progress of viable projects in the queue.”  The structure of withdrawal penalties will influence a developers’ interest in maintaining a project in the queue.   The Track 2 Proposal outlines a process that has Participating TOs retaining 50% of the interconnection customers’ posted security for PNUs until the upgrade associated with its security is developed and in service.  The Shell Companies recommend that a full refund be provided at the time of withdrawal or reasonable limit on the amount of time, for example no more than one-year from the withdrawal, to provide a more appropriate incentive as we agree with the CAISO concerning timing and mechanics.

In addition, the Shell Companies believe that the proposal for Option B Projects, that requires fifty percent of the IFS posting to be non-refundable if a project withdraws after the interconnection request is determined to be complete, is excessive.  The IFS posting is based on 30% of the estimated costs of ADNUs.  This CAISO indicates that the 30% amount is higher than FERC requirement under Order No. 2023 but it only applies to the cost of the ADNU and it is only an estimate.  The fact that it is an estimate that CAISO will want to make sure covers the costs means the non-refundable amount should be lower, not higher.  The Option B process already faces more hurdles in comparison with Option A projects, so the posting, deposit and withdrawal penalties do not need to be higher.

5. Requirement Pancaking for Projects sited externally to CAISO BAA

The proposed market expansion rules and the state of California’s policies encourage the development of projects located outside of the state.  There could be circumstance where projects seeking to interconnect with a transmission provider in a state adjacent to California will have to enter multiple interconnection queues.  Solutions to reduce or eliminate requirements that are duplicative should be sought in IPE Track 2.  For example, CAISO should consider either significantly reducing or waiving study deposits which are duplicative of another adjacent transmission provider’s process.  As an example, a hypothetical wind project located in Nevada and outside the CAISO border, may intend to schedule into the CAISO dynamically or as a pseudo-tied resource.  Because of this, a project may be entered into both a CAISO interconnection cluster as well as an interconnection process administered by another entity, in this case NV Energy.  This project could be required to pay study deposits twice—once to NV Energy and again to CAISO.  In an edge case such as this, the CAISO should coordinate with the external transmission provider to determine the timing and amount of security deposit that is reasonable for this type of project so that the transmission customer is not bearing the full weight and costs of two processes.  This project can demonstrate it has financial security at risk–but ‘doubling’ of study deposits would not signal incremental project viability assurance and would serve as a meaningful barrier for some out of state preferred resources.  Certainly, staggering the timing of the depositing could be considered in a situation like this.     

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

The Shell Companies comments are contained in the response field to Question #1. 

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

The Shell Companies comments are contained in the response field to Question #1. 

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

The Shell Companies comments are contained in the response field to Question #1. 

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

The Shell Companies comments are contained in the response field to Question #1. 

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

Upstream appreciates the opportunity to provide feedback on CAISO’s Straw Proposal as part of the 2023 Interconnection Process Enhancements Track 2 Process.  

Upstream generally supports the zonal approach to interconnection but implementing it at this time will delay QC15 and subsequent queue clusters that will be required to meet California’s carbon reduction goals.  CAISO often points to the number of megawatts in the queue as evidence the state’s goals can be met with existing projects, but many of these projects are speculative because of the tariff provision that allows ICs to post the deposit in lieu of site exclusivity.  Rather than reengineer GIDAP into a central planning type model, Upstream urges CAISO to implement a number of simple tariff amendments that would address the problem statements outlined in the Straw Proposal.  

1. FERC Order 2023 and the requirement to have site control prior to entering the queue will resolve CAISO’s core problem statement of “unsustainable increases in interconnection requests have overwhelmed the Generator Interconnection and Deliverability Allocation Procedures.”  The majority of projects that entered the queue in QC14 and QC15 posted the deposit in lieu of site exclusivity and implementing FERC 2023 would resolve the core issue that CAISO is trying to solve.  Rather than implement the draconian concepts put forth in the Straw Proposal, Upstream urges CAISO to implement FERC Order 2023 and let QC15 proceed without further delay.  
2. Multiple stakeholders, including the PTOs performing the studies, proposed thoughtful concepts on how to streamline the study and validation processes that would address “…interconnection requests have overwhelmed critical planning and engineering resources across the industry.”  Upstream urges CAISO to adopt the proposals put forth by SCE and the PTOs that would streamline the interconnection process rather than “throw the baby out with the bathwater” and completely reengineer GIDAP.  
3. After extensive discussions with market participants and stakeholders, the Scoring Criteria concept proposed by CAISO (4.2.5 of the Straw Proposal) would be difficult to implement in a manner that is objective, transparent, and equitable.  Rather than the Scoring Criteria concept, CAISO should engage stakeholders to implement a “gating” process by which projects must meet objective hurdles as they proceed through the interconnection queue.  

• Gate #1 - Prior to Entering the Interconnection Queue
  • Proof of Site Control (FERC Order 2023)
• Gate #2 - Prior to Execution of the LGIA
  • Application of Land Use Entitlements Deemed Complete
• Gate #3 - Within Five Years of Queue Application Date
  • Approval of Conditional Use Permit (or equivalent) and completion of environmental review (CEQA/NEPA)
  • Projects not meeting this requirement would be administratively withdrawn from the queue.  

With the modifications outlined above and further detailed below, Upstream supports CAISO’s efforts to address the problem statements that influenced the drafting of the Straw Proposal.  Implementation of FERC 2023 and the thoughtful development of “first-ready” concepts similar to the CAISO’s Independent Study Process will address many of the potential issues that could hinder California’s carbon reduction goals.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

The provisions (the requirement for site control being one) in FERC Order 2023 will resolve the overheated clusters that CAISO has dealt with in QC14 and QC15 and Upstream urges CAISO to quickly adopt FERC Order 2023 for QC15 without the need to adopt the additional proposals at this time.  The vast majority of projects in QC15 posted the deposit in lieu of site exclusivity and allowing QC15 to proceed with the requirements imposed by FERC Order 2023 would act as a “test case” to see if additional measures are needed to reduce the number of viable projects entering the queue.  

4.2.4 Prioritization of Long Lead-Time Resources 

Upstream opposes the CAISO’s proposal to “reserve” transmission plan deliverability for long lead-time resources on the grounds that doing so would restrict open access and potentially increase costs to ratepayers.  Over the past decade, the sector has witnessed an unprecented decline in the cost of solar compared to other renewable technologies.  If CAISO had “reserved” TPD for geothermal and wind resources ten years ago (which were the most cost competitive resources at the time), then LSEs would have been forced to contract with higher priced renewable resources.  LSEs would have lacked a broad base of projects of varying technologies to apply their least-cost, best-fit methodology for procurement.  It’s difficult enough to predict the cost of renewable technologies two to three years out.  Predicting the cost of renewable technologies ten years from now would be nothing but a guess at the expense of the ratepayer.  

Integrated Resource Planning by LSEs and state regulatory commissions is used as an outlook and shouldn’t be used to implement a central planning-like model for resource development.  Upstream urges CAISO maintain open access and let the market decide which resources are the most cost competitive.  

4.2.5 Scoring Criteria for Prioritization to the Study Process 

After extensive discussions with multiple stakeholders on how the CAISO’s Scoring Criteria could be objective, transparent, and equitable, Upstream urges CAISO to pivot and explore a “gating” process with stakeholders under which projects must meet objective hurdles as they proceed through the interconnection queue.  An example of these gates may be as follows;

• Gate #1 - Prior to Entering the Interconnection Queue
  • Proof of Site Control (FERC Order 2023)
• Gate #2 - Prior to Execution of the LGIA
  • Application of Land Use Entitlements Deemed Complete
• Gate #3 - Within Five Years of Queue Application Date
  • Approval of Conditional Use Permit (or equivalent) and completion of environmental review (CEQA/NEPA)
  • Projects not meeting this requirement would be administratively withdrawn from the queue. 

Upstream is interested in participating in the working group to refine the “gating” process outlined above.   

4.3.1 Zonal Auctions

Upstream opposes the zonal auction concept proposed by CAISO on the grounds that it will unduly favor a handful of large developers (some of which have been notoriously bad at project development in California).  If CAISO insists on implementing the Scoring Criteria as proposed, then Upstream urges CAISO to pursue a concept similar to PCDS under the TP Allocation Process in the event multiple projects have the same score in a particular zone.  Using CAISO’s example from the Straw Proposal…

1. Assume there is 266 MW of available transmission capacity in a zone and 400 MW is studied   
2. Seven 100 MW projects apply in this zone
   1. Projects A and B have a score of 70
   2. Projects C, D, and E have a viability score of 60
   3. Project F and G have a viability score of 50.
3. Projects A and B would be selected at their full capacity of 100MW
4. Projects C, D, and E would be selected to be studied at a portion of their capacity at 66.67 MW each.  If a project elects to withdraw due to the downsizing, then the capacity would be allocated to the remaining projects.  
5. Projects F and G would not be considered.  

Furthermore, the zonal auction concept would incentivize developers with large public or private land holdings that don’t require on-going option payments to submit extremely large projects that force each zone into the zonal auction.  This would concentrate interconnection and project development with a few developers that would yield market power when negotiating with LSEs.  CAISO has proposed the 25% cap for each queue cluster, but developers could concentrate their “cap amount” to certain zones depending on the number of megawatts that will be studied in each zone and across CAISO.  

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

Upstream does not have comments on Option B at this time.  

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

Due to the complexity and timing issues imposed by the implementation of FERC Order 2023 and CAISO’s other IPE initiatives, Upstream urges CAISO to address the deliverability allocation and retention issues in a future stakeholder process.  

4.4.1 CAISO Proposal to Limit EO Projects to Allocation Group C

Upstream strongly opposes the CAISO’s proposal to limit the eligibility of Energy Only projects to Allocation Group C.  CAISO asserts in its Straw Proposal that energy only projects have low viability, but this is simply not true as evidenced by the number of energy only projects that received deliverability under Allocation Groups A and B that had been subject to the Gates Transformer Constraint…

• Q1120, Q1139, Q1243, and Q1593 qualified as Allocation Group A which represents approximately 1,150 MWs
• Q1242, Q1713, Q1718, and Q1728 qualified as Allocation Group B which represents approximately 450 MWs

If approved as drafted, these projects would have only been eligible for Allocation Group C (none of which would have been able to) and CAISO would have foregone approximately 1,600 MWs of capacity that is coming online to meet LSE’s MTR Obligations.

Furthermore, CAISO proposed in the 2022 Interconnection Process Enhancements process, with broad stakeholder support, to reduce the number of Allocation Groups from seven to four, under which Energy Only projects would be treated equally to projects that haven’t been converted to Energy Only (Energy Only projects could now qualify for Allocation Group A or Allocation Group B). Because of this change, many developers elected to convert their projects to Energy Only due to the provision in the tariff that restricts the CAISO and the IC from negotiating the LGIA while a project is parked.  What CAISO has proposed is analogous to a “bait and switch” under which projects were incentivized by CAISO to convert to Energy Only and are now being bludgeoned out of the queue.  More than 800 MWs of these EO projects are now short-listed or contracted, and CAISO’s proposal would make these projects unfinanceable and unable to come online to meet LSE’s MTR Obligations.  

Due to reasons unique to California, project development takes longer than development in other RTOs.  A project that has moved through two TP Allocations without receiving deliverability (and been converted to EO) is often more advanced than a project that recently entered the queue through the previous two Queue Clusters.  Rather than bludgeon EO projects out of the queue through this proposal, CAISO should rely on its proposals made under 5.6 Viability Criteria and Time-in-Queue Limit of the Straw Proposal.  

4.4.2 Modifications to Interim Deliverability

Upstream supports enhancements to interim deliverability and “conditional deliverability” for N-2 contingencies further outlined in CAISO’s Deliverability Assessment Methodology Revisions.  

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

5.1 One Time Withdrawal Opportunity

Upstream supports CAISO’s proposal to allow projects a one-time opportunity to withdrawal from the queue and agrees that costs aren’t shifted to the PTOs.  Timing of the one-time opportunity to withdrawal will be important and should be scheduled prior to development of the base case for QC15.  

5.2 Limited Operation Study Process Updates

Upstream supports CAISO’s proposal to increase the LOS request to nine months but is concerned that the additional three months won’t allow the provision to be effectively utilized by ICs.  The LOS would need to be completed prior to the IC obtaining project financing, a process that’s often completed more than a year prior to commercial operation.    

5.4 Remove Suspension Rights for LGIA

Upstream supports CAISO’s proposal to eliminate suspension rights from LGIAs.

5.5 Limitations to Transmission Plan Deliverability Transferability

Upstream opposes CAISO’s proposal to force projects that transfer deliverability to withdraw or downsize based on the amount of deliverability that was transferred. 

In the background to the proposal, CAISO states that the ability to transfer deliverability has been abused by developers transferring deliverability from earlier queued projects to later queued projects.  CAISO fails to mention the successes - the transfer of deliverability over the past two years has allows hundreds of MWs of dispatchable capacity to come online (including two utility-owned storage projects) in 2023 and 2024.  CAISO should continue to enforce the provision in the BPM that projects transferring deliverability must have CODs that align (to prevent earlier queued projects from transferring to later queued projects), but shouldn’t make further revisions to the ability to transfer deliverability that were agreed to by stakeholders less than two years ago in the 2021 Interconnection Process Enhancements stakeholder process.  

5.6 Viability Criteria and Time-In-Queue Limit
Upstream supports CAISO’s proposal to impose unavoidable time-in-queue requirements for all projects in the queue without executed GIAs.  These dates and durations should be extended on a day-for-day basis for delays caused by CAISO and/or the PTO.  

5.8 Earlier Financial Security Postings for Projects with Shared Upgrades

Upstream supports this proposal as drafted.

5.9 Revise Timing of GIA Amendments to Incorporate Modification Results

Upstream supports CAISO’s proposal to amend GIAs close to the project’s synchronization date.  

5.10 Commence Network Upgrades When the First NTP is Provided to the PTO

Upstream supports this proposal as drafted.

1. Please provide feedback on the proposal to provide data to stakeholders to enable the zonal approach to interconnection:

Vistra understands the role of transmission zones as used in the Local Regulatory Agencies resource planning and appreciates CAISO producing 2022-2023 Transmission Plan results in a way that draws clear relationships between the Transmission Planning Process (TPP) and the resource plans that are used to produce those results. Our understanding is that there are Point of Interconnections (POI) outside the transmission zones on the CAISO controlled grid. The CAISO will need to include these POI in the data transparency efforts including in the FERC Order 2023 directed heat map.

Vistra believes that the FERC Order 2023 requirements in Paragraph 135 require making physical interconnection capacity information available to Interconnection Customers (IC). We hope the CAISO shares the same position. However, we noted that in the straw proposal the CAISO did not include physical interconnection service capacity availability specifically. Please confirm that the physical interconnection availability is being provided in the future heat map. The heat map should show:

• Physical interconnection service capacity availability
• Full capacity deliverability status transmission capability
• Interim deliverability status transmission capability and by year
• Energy only deliverability transmission capability

Please provide responses to the following questions:

1. Confirm whether every point of interconnection is mapped to a transmission zone or not.
2. If there are POIs outside the CPUC transmission zones, then please clarify how CAISO will be providing the interconnection feasibility information for the POI outside transmission zones on its controlled grid.
3. Please confirm if CAISO will develop a heat map with available interconnection service capacity, available full capacity deliverability transmission capacity, and available energy only deliverability status.
4. Clarify whether any of the information available will be provided by year, especially for points that may have interim capacity availability at a given point in time.

Vistra requests the CAISO revise its proposal to specify that the data transparency will be available by July 1, 2024. IC need the heat map and the additional information required as per zonal approach proposal at least nine months prior to the next interconnection request window opening to allow sufficient time to enhance our operations to incorporate the new information.[1] Ideally, Vistra would like to see a return to the April interconnection window opening and as such we request the CAISO commit to making data available by July 1, 2024 (start of Q3 2024). This should allow the CAISO to incorporate the 2023-2024 TPP results into the heat map and available information, especially because the preliminary results will be available to begin working with earlier in the year. Alternatively, or in addition, we request an addition to the proposal that commits that the CAISO will not open a new interconnection window sooner than nine months after making the heat map and additional information available to ICs.

[1] CAISO straw proposal says on Page 19 that the “ISO will develop a heat map along with associated information…by Q3/Q4 2024”. It is important that the CAISO be able to commit to July 1, 2024 if it is striving towards an April 2025 cluster window. If April 2025 cluster window is unlikely then this clarity will allow IC to be more comfortable with the data being available later in the year.

2. Please provide feedback on proposed interconnection request requirements and interconnection request review

a. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU. b. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements. c. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO. i. Please indicate interest in participating in a workgroup to refine scoring criteria. d. Please provide feedback on auction design and use of auction revenues.

Vistra appreciated the chance to engage with the CAISO and stakeholders in the IPE 2023 workshops. We have encouraged the CAISO to move its Generator Interconnection and Deliverability Allocation Procedures further in the direction of a “first ready, first served” cluster process, consistent with FERC’s Order No. 2023. We applaud the CAISO for hearing the calls from the stakeholder community to think about advancing first ready projects through the Interconnection Request (IR) application stage into studies as well as advancing them through the TPD allocation process into being able to begin negotiating Generator Interconnection Agreement (GIA). We support convening a subgroup to refine viability scoring consistent with objectives of Order No. 2023.

We recommend the subgroup tackle the rules for viability at different stages, including the IR application stage and the Transmission Plan Deliverability (TPD) allocation stage. The subgroup scope should allow for the discussions to produce two deliverables:

• Deliverable 1: Metrics, weights based on how relevant the metric is to the project being “ready”, and score that are reasonable to have accomplished by the time an IR is submitted.
• Deliverable 2: Metrics, weights based on how relevant the metric is to the project being “ready”, and score that are reasonable to have accomplished by the time an IR submits its TPD affidavit prior to TPD process.

In addition, this group should explore whether Deliverable 1 could inform minimum viability requirements rather than ranking of viability at the IR application stage. If the FERC Order 2023 CVC requirements are not expected to consistently limit IR submissions below the zonal cap, then this group could explore how the viability scoring for IR application stage may have a break point that is better used as a minimum.

CAISO table on page 25 includes some characteristics of projects that the subgroup can use to begin conversations. However, this list is not appropriate to move forward to a Draft Final Proposal. It includes items that would not be reasonable for a project to have at either the IR application stage or TPD affidavit stage and why including points for these would put the CAISO’s thumb on commercial operations to drive changes to commercial operations rather than changes to its interconnection process (e.g., permitting may not be started at IR application stage since the permit approval timelines are shorter than queue timelines). It also includes items that if included would put its thumb on how commercial operations occur today in a way that could have unintended consequences (e.g., community support), and we need the ability to share these concerns in the subgroup to talk through how the adverse outcomes can be minimized. It also includes items that may be double counting the same analysis performed in the California Public Utility Commission’s busbar mapping of its Transmission Planning Process portfolios (e.g., location in load pockets not needing Area Deliverability Network Upgrades (ADNU)). We request the ability to participate in the subgroup to help work through these issues by bringing useful development experience.

Vistra also believes there is need to further refine what is the “transmission capacity” that this zonal cap would be applied to in more detail. As indicated in our response to #1, Vistra believes there is available physical interconnection service capacity available at POI outside of the transmission zones. Further, we also believe that it is possible that there is full capacity deliverability, interim deliverability, or energy deliverability capacity at these POI available beyond those within the transmission zones. CAISO should apply the 150% zonal cap proposed against the physical interconnection service capacity in that transmission zone. At the IR application stage, it will be overly restrictive to set a zonal cap as a percentage of Full Capacity Deliverability Status especially given there are energy only resources or co-located resources seeking partial deliverability within the set of IR that will be submitted. Using the physical interconnection capability available in the area is an appropriate basis for a zonal cap. If the CAISO can clarify that the zonal cap is 150% of physical interconnection service capacity available, then Vistra can be comfortable with 150% threshold.

CAISO should not force all interconnection service capacity requests outside of the “transmission zones” to be Option B projects when there is interconnection service capacity available in the location the projects are seeking to interconnect. CAISO should provide the data transparency for POI outside of transmission zones as requested and should allow projects to be Option A at POI outside of transmission zones if there is interconnection service capability available to support the physical interconnections. Regardless of whether a project is Option A or Option B, Vistra believes the minimum Commercial Viability Criteria is going to be accomplished by CAISO complying with FERC Order 2023 minimum Commercial Viability Criteria requirements. Currently, we think it is premature to require more CVC requirements for Option B projects over Option A projects.

Finally, Vistra is skeptical that the 25% developer cap applied to physical interconnection service capacity available is necessary for this proposal. The reason for this is that there may be some areas with very limited interconnection service capacity available where 25% is actually a very modest MW amount. Vistra suggests that CAISO should defer the topic of a developer cap until it can provide the heat map and additional information as well as until this effort confirms the basis of the caps so that we can better understand what the proposal means in MW by area. Given the CAISO is not making this available until 2024, we request the CAISO defer this item to the next IPE initiative as well.

See responses to your questions below:

1. Please provide suggestions for how to appropriately incorporate LSE interests and commercial procurement activities earlier in the process to support the objectives of the MOU.

Under our current commercial reality, it is suboptimal, if not inappropriate, to have developers offer the “idea” of a project into commercial procurement activities instead of offering a bona-fide project. Projects that do not have executed GIA are not sufficiently developed to be able to offer for procurement given that the project does not have Full Capacity Deliverability Status (FCDS) nor certainty on costs and milestones to achieve COD. CAISO’s straw proposal continues to state that it wants to include contracting status even at the IR application stage to “incentivize advanced development projects”.[1] This is inconsistent with much of how commercial activity is performed today, because much of commercial activity waits to offer a project until it is certain it can provide the Resource Adequacy (RA) value that is being offered and that the offer price can allow for the developer to bring the asset online. This proposal will not incentivize advanced development of projects but instead it will put CAISO’s thumb on the scale of how development and commercial activities are done today, and incentivize premature development of projects by incentivizing projects with more uncertainties and greater risks to be offered into procurement solicitations. It will also incentivize LSEs to enter into these riskier contracts that will likely have outsized risks on the LSE. CAISO’s existing TPD allocation process has introduced some of these undesirable incentives to prematurely offer projects and shift risks onto LSEs, but these were proposed with the understanding a full reform would be able to be discussed in this effort to replace the TPD allocation groups with more appropriate metric of viability. If the CAISO insists on doubling down on wanting premature projects to offer into solicitations then commercial activities will need to significantly change, and the Local Reliability Authorities buy-in will be needed.

We understand the motivation of the CAISO to ensure it is meeting its portion of the MOU. We have reviewed the MOU and we do not see a commitment to incorporate LSE procurement activities into the interconnection process. The MOU does say that “The ISO will seek to prioritize interconnection process activities to support the resources with the operational characteristics and geographic locations consistent with the resource planning conducted by the CEC and CPUC, and the transmission planning conducted by the ISO based on that resource planning”.[2] Vistra finds the commitment does not imply that LSE interest or procurement activity should be used to prioritize projects, but instead that the TPP portfolios that are informed by LRA resource planning should be prioritized. The CPUC and other LRA plans transmitted to the CAISO for its TPP are informed by individual LRA planning such as the Integrated Resource Planning (IRP) Process. For example, the CPUC TPP portfolio is based on the IRP portfolios mapped to substations, which in turn the IRP portfolios are based on individual LSE procurement plans. The transmitted TPP portfolios already have LSE interests on commercial procurement activities built into it. The resulting transmission capacity for physical interconnection service capacity that results from the TPP is informed by LSE interests and is best understood through looking at the TPP portfolio. The MOU does ask the CAISO to prioritize transmission zones and operational characteristics in the TPP portfolio. To better do this, Vistra believes the CAISO could include points for the IR in the IR application stage if it meets one of the operational characteristic-transmission zone buckets in the TPP portfolios. IC are already using the IRP portfolios and Transmission Plan to identify viable project locations. Any other efforts to incorporate LSE interest would put the CAISO’s thumb to how commercial activities occur changing the commercial markets and picking winners and losers. The interconnection process needs to remain independent, neutral to offtakers or types of developer, and be driven by transmission availability and other commercial viability criteria. Vistra will work with CAISO in a subgroup to refine the IR application stage viability criteria to explore how the TPP portfolios could be used to prioritize projects where interconnection service capacity is scarce.

Consistent with the above, the CAISO’s proposal to automatically include any project that a non-CPUC jurisdictional Load Serving Entities (LSE) demonstrates is a preferred resource in its resource plan appears to unduly preference utility development over non-utility development. This clearly picks winners and losers among IR submitted in the relevant area.

2. Please share your thoughts on the relationship and potential trade-offs between the scoring criteria and auction elements.

Vistra requests the CAISO defer the zonal sealed-bid auction until the next IPE project, we assume is in 2024 given the timeline, so that a robust discussion can occur on this novel concept. We encourage the CAISO to propose IPE 2023 suite of proposals that would allow the zonal cap to be relaxed for projects that have viability score ties. With the clarity that 150% is 150% of physical interconnection service in combination with the 90% site control requirements we find this to be a reasonable starting place. Setting the zonal cap into effect and updating the minimum CVC requirements for the IR application stage initially. Then allowing more time to explore a sealed-bid auction.

3. Please share specific feedback on and recommendations for scoring criteria that are both reasonable at the interconnection request stage and easily validated by the ISO.

Vistra volunteers for the subgroup to have this discussion. See above.

4. Please indicate interest in participating in a workgroup to refine scoring criteria.

Vistra volunteers.

5. Please provide feedback on auction design and use of auction revenues.

Vistra requests CAISO defer this scope and focus on the Option B modifications and viability scoring subgroups given the time afforded for this project to be refined and advanced to the Board. It is necessary to defer topics that require more vetting to an IPE effort that we can continue working on in 2024. 

[1] Straw Proposal at Page 24.

[2] Memorandum of Understanding #11.

3. Please provide feedback on the study process elements of the straw proposal

a. Please provide feedback on the modifications to the Option B process.

See below Vistra’s feedback on Section 4.3 of the Straw Proposal.

Section 4.3.1 Zonal Auctions

Vistra requests the CAISO revise its proposal to remove the zonal auction to break ties of excess proposed capacity above the zonal cap and to allow tied projects to exceed the zonal cap as a transitional approach. While we appreciate the CAISO’s creative thinking, we are struggling with a concern that there is not enough time to develop a robust zonal auction framework along with the other transformative changes included in this proposal. If CAISO is set on releasing a Draft Final Proposal on November 21, 2023 then we have only roughly five weeks to make meaningful progress on this proposal so that CAISO can be ready for a Draft Final Proposal that has been further developed. We believe our collective time is better spent on subgroup efforts focusing on two really important elements that need refined to be successful in achieving CAISO’s goal (1) refining the Option B modifications and (2) viability scoring for intake and TPD allocation. Given this practical consideration, Vistra requests the CAISO defer the sealed-bid auction proposal to a future initiative that would be effective for the next cluster window (QC16). We are happy to have future discussions on this topic at a time that will not raise need to unnecessarily delay this effort.

Section 4.3.2 Network Subscription Model Proposal

Vistra appreciates the CAISO allowing stakeholders to provide proposals and afford an opportunity for stakeholders to shed light on where there may be shared interest in CAISO further considering these enhancements. We received positive feedback on our network service subscription model proposal from other stakeholders. As for the parties that did not support the proposal, we believe this is due to misunderstanding the value of the proposal and look forward to discussing this to explain how this will improve outcomes for ratepayers.

CAISO noted in its proposal that Sonoma Clean Power thought the subscription model would pass costs along to ratepayers which disregards the fact that projects are doing this today for costs associated with buying transmission deliverability transfers. Under current activities, ratepayers are already paying for the transmission deliverability costs through the transmission access charge. It is this inequity that we hope to in part see addressed through CAISO allowing entities seeking network service interconnection through GIDAP to offset the costs of the transmission plan to guarantee Full Capacity Deliverability Status instead of allowing a process that incentivizes the pancaking of this cost for ratepayers.

Vistra accepts the CAISO’s decision that our proposal is better suited in a transmission planning enhancements effort. We are seeking clarity on next steps, for example is the TPP enhancements effort going to be held by CAISO or does CAISO expect us to submit a policy catalogue submission for a TPP enhancements. Will the CAISO commit to our transmission planning enhancements effort that would include this scope or should we submit a catalogue request?

Section 4.3.2 Option B Process

Vistra applauds CAISO for moving forward on Option B modifications in IPE 2023. We believe that Option B modifications are essential to the success of this effort, and if implemented correctly can achieve many of the improvements to the GIDAP that we sought in our more comprehensive subscription model proposal. The proposal as drafted falls short of achieving the desired outcomes and does not yet provide an approach that accomplished principle 1. Vistra requests the CAISO use a subgroup to refine its Option B modification proposal between now and the Draft Final Proposal.

CAISO and stakeholders aligned on principles that this effort should be able to achieve. The first principle, “Prioritize interconnection in zones where transmission capacity exists or new transmission has been approved, while providing opportunities to identify and provide alternative points of interconnection or upgrades.” CAISO’s Option B modifications puts forward a process that partially meets this principle but requires additional refinements and work to fully meet this principle.

CAISO proposal for Option B modifications only addresses the portion of Principle 1 of providing opportunities to identify and provide alternative points of interconnection. It falls short of proposing a path forward for providing opportunities to identify and provide alternative upgrades in areas with TPD available that is less than could be available through triggering ADNU previously identified. A subgroup should be formed to work on refinements to this proposal that would adopt narrow improvements. Option B should not be restricted to projects seeking to interconnect in areas with no TPD, but instead to projects willing to trigger ADNU individually or collectively to increase FCDS in any area.

First, CAISO should make a narrow change to define Option B projects as any project or group of projects that are willing to trigger Area Deliverability Network Upgrades (ADNU) to increase the FCDS in a transmission zone or in areas outside a transmission zone. This narrow change would allow the proposal to meet the intent of principle 1 that affords alternative points of interconnection outside the transmission zones or alternative upgrades within a transmission zone that increase FCDS. The narrow change would also allow Option B project(s) in transmission zones to collectively trigger ADNU already identified on the Transmission Capability Estimates Whitepaper or in the Transmission Plan Deliverability Report. For example, the July 5, 2023 Transmission Capability Estimates shows there is 9,184 MW of FCDS estimated for the Vincent-Lugo Constraint where an ADNU costing $86 million dollars could increase this estimated FCDS by 2,000 MW. The CAISO would be disallowing Option B projects to collectively identify willingness to fund the $86 million ADNU cost to trigger the ADNU purely because the FCDS is associated with an area within an existing transmission zone that has some FCDS. The subgroup should be used to help further develop this element with the CAISO to reach an approach that can facilitate meeting principle 1.

Second, CAISO should make a narrow change to propose a process that would support multiple IC collectively opting into covering the ADNU costs associated with the Option B projects collectively. This element can be developed with the subgroup in time for inclusion in the Draft Final Proposal.

Third, CAISO should make a narrow change to add a process step in between any IR intake screening and commencing studies that would allow projects that are not selected to be included in the study process as Option A to convert to option B project before commencing the study. This new process step can be developed expediently through leveraging a subgroup.

Fourth, CAISO should explicitly state that Option B projects do not have to compete for TPD and are fully deliverable with FCDS purely due to being Option B project.

Fifth, CAISO should clarify the cost reimbursement rules for Option B to make clear Option B are eligible for reimbursement like Option A projects, for example for Local Deliverability Network Upgrades. Additionally, if the NU that the option B projects have opted into funding is triggered by the TPP before the NU construction begins then the option B projects should be released from their obligation to fully fund the ADNU that the TPP now includes and reimbursed for any funds spent that the Transmission Access Charges will now cover. This ensures that option B projects are not providing funds that will be provided to PTO by the TAC.

Section 4.3.3 Single-Phase Study Process

Moving to a single-phase study process makes it more difficult to anticipate timeline impacts of this suite of proposals on Cluster 15 and Cluster 16. In CAISO Tariff Appendix DD Section 17.1(g), the CAISO Tariff states: “The CAISO will not accept Independent Study Process Interconnection Requests pursuant to Section 4 until Cluster 15 has received its Phase I Interconnection Study results.”

Given the existing Tariff language, we have expected that a best-case scenario consistent with the Tariff language could result in:

• Commencing Cluster 15 studies on September 26, 2024 with Phase I results possible by May 2025 (roughly 8 months) and Phase II possible by March 2026 assuming the ability to study processing time seen in Cluster 13.
• Opening Cluster 16 window no sooner than May 2025 when Cluster 15 is expecting to receive its Phase I results.

To understand how the existing Appendix DD Section 17 Cluster 15 procedures including the one impacting Cluster 16 are impacted by this proposal, we need more clarity on how long the CAISO believes the new single study process will take. For instance, is CAISO proposal to simply not perform Phase I and perform Phase II as the single study. For Cluster 13, Phase II processing timeline from beginning to completing the meeting in Cluster 13 took roughly 8 months and if the CAISO is proposing Phase II as its single study process does this mean that it will take 8 months after completing IR validation? It is critical that we have clarity on what the best-case timeline for the single study process is expected to be assuming these proposals are successful.

CAISO should include a proposed change to Appendix DD Section 17.1(g) in scope given the single study process since Phase I results will not apply to Cluster 15. The Tariff needs to be revised because of this Track 2 to make clear that it applies to the single study process forthcoming under this proposal.

Additionally, please clarify the impact to the initial and second IFS payments. Vistra assumes that the initial IFS will be due after the IC TPD allocation decision is made and if not parking then just prior to moving into negotiating the GIA. We appreciate CAISO confirming the sequence expected for the IFS under a single study process.

4. Please provide feedback on proposed modifications to Transmission Plan Deliverability (TPD) and Interim Deliverability

a. TPD allocation b. Interim Deliverability

See below Vistra’s feedback on Section 4.4 of the Straw Proposal.

Section 4.4.1 Modifications to the Transmission Plan Deliverability Allocation Process

Vistra strongly agrees with the importance that CAISO is affording the need to reform the TPD allocation process. Today, the biggest challenges that Vistra encounters in the GIDAP come from participating in a TPD allocation process that is allocating TPD to projects that are less viable than projects that are far closer to commercial development. The data exists to validate this purely by seeing the frequency of interconnection request transfers or transmission deliverability transfers that occur from projects that have received TPD that monetize that TPD asset through selling either its position or transferring its TPD allocation. In narrow circumstances, the ability to procure an interconnection request or procure TPD for a transfer may be necessary to address errors in TPD allocation, but a frequent occurrence of this appears to be inefficient.

The current process forces projects to convert to Energy Only at some point to stay in the queue, which a project needing Full Capacity Deliverability Status to proceed is unable to do. Consequently, buyers are losing the option to procure a viable project that can proceed forward in a procurement solicitation because that project did not receive TPD allocation and withdraws from the queue. For a viable project ready to move forward to execute a GIA and begin offering a ready project to buyers, this means years of development work lost, and lost opportunities to help state achieve its goals in those areas. Given how important this step of the process is, effectively leading to the final determination that a project is viable or not, we agree that this should be afforded much more time and review. We also strongly agree that the viability requirements should be resolved to impact the IR intake first before tackling this challenge.

Vistra strongly supports CAISO setting up a subgroup to focus on developing viability scoring that can be expected at various stages in the development process. We hope it is feasible by November 21, 2023 for the subgroup to help CAISO refine its viability scoring proposal, but to achieve that the subgroup should be launched as soon as possible. The subgroups working on viability will be able to immediately inform the IR intake screen proposal in IPE 2023 and can be leveraged for TPD allocation enhancements in the next IPE.

CAISO stated it will continue to explore TPD allocation issues with stakeholders to develop a proposal. Given the current timeline, we understand this to mean in an IPE 2024 effort. Vistra requests the CAISO clarify that it plans to explore this topic in an IPE 2024 effort not in IPE 2023.

Section 4.4.2 Modifications to Interim Deliverability

Vistra directionally supports the CAISO proposal. Any improvements to interim deliverability relative to today is a positive move. We agree additional work is needed on this topic.

5. Please provide comments and feedback on Contract and Queue Management elements of the straw proposal

a. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? b. Are the updates to the Limited Operation Study sufficient? c. Comments on adding asynchronous generating facility requirements in the SGIA d. Comments on removal of suspension rights e. Comments on TPD Transferability proposal f. Comments on viability criteria and time-in-queue limit g. Comments on project Modification updates h. Comments on postings for shared network upgrades i. Comments on timing of incorporating MMAs into the GIA j. Comments on timing on starting network upgrades

Responses to CAISO questions:

1. Does the one-time withdrawal opportunity sufficiently address the assignment of costs of withdrawn projects? Vistra asks the CAISO to confirm that this proposal will not push cost responsibility onto any projects that remain. The CAISO straw proposal says “the CAISO attempts to share the financing cost burden…among the Participating TOs and the withdrawing interconnection customer”, however it does not commit to ensure that no costs will be shifted onto any remaining interconnection customers.[1] To be able to support this proposal, we need to see a commitment from CAISO that explicitly holds harmless the remaining projects in the Draft Final Proposal. We appreciate the clarity being provided.
2. Are the updates to the Limited Operation Study sufficient? Vistra supports CAISO’s proposed LOS change to allow it to be requested 9 months prior to synchronization. The relationship between MMA and LOS is insufficiently clear in the straw proposal and needs to be further refined. For instance, it refers to technical-MMA, which implies there are non-technical MMAs. Later it states that an MMA may trigger it to be re-evaluated, which implies that the MMA may not trigger the need to restart the LOS. Greater definition is needed on what a technical versus non-technical MMA are and which type of MMAs may trigger the need to restart the LOS in the next iteration.
3. Comments on adding asynchronous generating facility requirements in the SGIA? Vistra supports CAISO’s proposal to bring Small Generator Interconnection Agreements and Large Generator Interconnection Agreements consistent for asynchronous generators.
4. Comments on removal of suspension rights? None currently.
5. Comments on TPD Transferability proposal? Vistra has provided modest feedback on this topic in the past because we primarily want to see the TPP enhanced to afford a mechanism for projects that would be willing to pay for a TPD transfer to procure the assurance of the TPD upfront in the TPP so that it offsets the Transmission Plan costs which allows for the IC to receive the benefit of assuring TPD for its project by sharing a portion of the cost of the Transmission Plan that is supporting that TPD. We hope to move this process out of GIDAP through TPP enhancements that would allow network subscriptions in exchange for TPD and ideally FCDS priority commensurate with funding the transmission system. Today, the TPD transfers are largely needed because the TPD allocation is allocating to projects that do not need TPD to support FCDS whether because they are financed through long-term REC and are ineligible for RA or because the project is not viable, where viable projects need the TPD allocation creating a need for IC to buy this asset from other IC. This does increase overall costs of new resource development and we would like to see it limited organically through allowing TPP network subscriptions. Given that we are hopeful the CAISO will commit to exploring enhancements in TPP, we can support significantly limiting TPD transfers because the bulk of TPD transfers should not be needed if CAISO can provide a mechanism in TPP for IC to subscribe to the network for TPD.
6. Comments on viability criteria and time-in-queue limit? Vistra is confused by the dates that the CAISO included in its straw proposal because it seems to inadvertently imply that CAISO is removing parking from its rules. For example, for Cluster 14 the GIA executed no later than December 31, 2025 does not seem to make sense given the ability to participate in three TPD allocation cycles. Given the straw proposal does not propose a change to this, a C14 project is expected to compete for TPD allocation for the first time in 2024 with results by May 31, 2024, for the second time in ~Q2 2025, and for the final time in ~Q2 2026. For a project that receives its TPD allocation on the third TPD attempt, it would post its 2^nd IFS[2] in Q2 2026. Following this there would need to be time to negotiate the GIA before executing. As shown, a December 31, 2025 GIA execution deadline is not feasible for projects that park. Please revise your proposal to make the dates for clusters for Executing GIA and for Notice to Proceed & 3^rd IFS specific for projects that do not park, park once, and park twice. For example, for Cluster 14 projects we understand your proposal to be that it must have GIA executed no later than December 2025, December 2026, and December 2027 respectively. Further, Cluster 14 projects must submit Notice to Proceed and 3^rd IFS by December 2026, December 2027, and December 2028 respectively. Vistra will provide feedback on our position once the proposal is clarified for projects that do not park, park once, and park twice.
7. Comments on project Modification updates? Vistra encourages the CAISO to continue to explore MMA enhancements discussed at the workshops, and even in CAISO’s discussion paper. We appreciate that there is no risk-free way to accept modifications without a formal review and evaluation. Even with that, we continue to think there are efficiencies to the process that can be gained from ensuring that the complexity and time of the review needed is right sized to the type of MMA. We respectfully request this topic be a focus of the next IPE along with the TPD allocation process enhancements.
8. Comments on postings for shared network upgrades? None currently.
9. Comments on timing of incorporating MMAs into the GIA? This section overlaps a bit with the change to allow LOS to be requested nine months prior to synchronization. This section seems to imply that no MMA may be submitted after nine months prior to synchronization because the GIA so that “all modifications would be incorporated into the agreement nine months before the synchronization date in the GIA”,[3] but this seems to conflict with the idea that MMA submitted after the LOS commences may or may not require restarting the LOS. Vistra suggests the CAISO move this discussion into the section with the LOS changes and think through this interconnection more. We reserve our feedback on the LOS, MMA, and GIA changes until there is a clearer understanding of this proposal.
10. Comments on timing on starting network upgrades? Vistra supports the CAISO proposal to add the NTP and third posting[4] dates to the GIA. 

[1] Straw Proposal at Page 43.

[2] As mentioned above Vistra assumes the 2^nd IFS is changing to the initial IFS under a single study process.

[3] Straw Proposal at Page 59.

[4] Under a single study process this may be the second posting, please confirm. Additionally, please confirm whether the PTO proposal to require a posting prior to executing GIA and then keeping a final posting with the Notice to Proceed is still being considered. If it is, Vistra would like both the third (or second under single study) and fourth (or third under single study) to be in the GIA.