Revised Draft1 Distributed Generation Interconnections - Group Study Process Option: Voluntary Rolling Window Presented to Massachusetts Distributed Generation Collaborative Working Group on 7/18/2013 Bill Walsh, Northeast Utilities

Revised Draft2 General Concepts Group study concept is specific to the system impact study (SIS) Not applicable to any other phase, i.e. pre-application, technical screening, supplemental review, detailed study or construction. A group study is a single SIS which treats multiple applications as one A group study would only be relevant in instances where there are multiple applicants in, or entering into, the SIS stage that may interconnect to common elements of the utility grid; and, where one applicant may potentially impact the system upgrade requirements needed for one or more of the other applicants (typically common circuit and/or substation transformer)

Revised Draft3 Potential Developer Benefits and Risks Benefits: –Socialize costs Impact study Common upgrades –Reduction in upgrade costs for individual applicants may turn financially non-viable projects into viable ones Risks: –Upgrade cost socialization may increase cost to individual applicant –Time-line impacts: potentially increased uncertainty & duration –Churn in group could have adverse time and financial consequences

Revised Draft4 Considerations – Utilities While utilities recognize the potential overall DG program benefit to group study treatment, they also recognize the increased risks and uncertainties for DG developers and are therefore largely neutral on its adoption Group Process should not place additional resource burden on utilities –Group control over administration will allow members to control admin costs, contain decision making to stakeholders, and prevent utilities from being perceived to be creating adverse outcomes to individual members or the group as a whole

Revised Draft5 (continued) Once formed, the group should have a single liaison (legal entity?) with the utility that will be responsible for all cost obligations attributable to the group including SIS, detailed design and construction of common upgrades Detailed design and construction of common upgrades will not be undertaken until costs are paid in full consistent with tariff Detailed studies and construction of individual member upgrades will be processed independent of the group study process

Revised Draft6 (continued) Each member will be issued a separate ISA that will include a description of their non-common upgrades and costs and will include a contingency that requires the provisioning of a release issued by the group liaison Utilities will provide cost allocations attributable to each member for common costs consistent with the tariff

Revised Draft7 Voluntary Rolling Window Attributes Initial applicant (#1) with no electrical interdependency follows sequential process Upon receipt of subsequent application with electrical interdependence to #1, Utility s #1. “There’s a project 2. Do you want your contact information shared with #2 so that consideration may be given to forming a group?” –#1 & #2 processed as individuals under sequential process pending group agreement #1 informs utility – No to group… continue sequential, Yes… #1 & #2 inform utility of interest.

Revised Draft8 (continued) Liaison submits application for group Utility assigns group same queue position as #1. Both retain original applications and original queue positions Liaison impact study agreement executed with incremental study cost. Study clock reset (complex time frame? Mutual agreement?) Utility prosecutes group study and provides both group and individual results Liaison determines if group to be retained or dissolved/revert to individual

Revised Draft9 (continued) Detailed design and construction process requirements same as for sequential. –Individual applicant queue position determines order for individuals. Common upgrades done 1 st Process continues for subsequent applications with electrical interdependence with group with group becoming #1 in the prior example

Revised Draft10 (continued) In the event that an electrically interdependent applicant opts not to participate in the group, it is evaluated within the group study, and if it benefits from the common upgrades, it is forced to participate, subject to the approval of the group, with said approval documentation to be provided to the utility by the group liaison. –If not accepted into the group, or if this provision is not agreed to, an applicant that does not participate in the group is queued behind the group for independent study

Revised Draft11 DGWG Meeting Discussions and Follow-up If group studies were mandatory and there was significant interest in DG development within an electrically interdependent area, there is a likelihood that system upgrades required for the entire group would be extensive and potentially cost prohibitive. Unraveling of the group for such an outcome may be complicated and all applicants may experience significant time delays. The average time to process applications in a mandatory fixed window process could be longer than that for the voluntary rolling window (processing time for the voluntary process is significantly under group control)

Revised Draft12 (continued) There is reference in the tariff to utilities’ line extension policy treatment where DG customers would benefit from the upgrades paid for by a prior customer. Several concerns include: –Line extension policies vary between utilities and non-uniform treatment could introduce inequities –Utilities would need to add resource and introduce special processes and systems Systems, processes, and staff additions would be needed to allow accurate queries to identify prior upgrades within an applicable time window. The system would need to be able to identify which DG customers paid for the upgrades and what cost allocations would be A DG customer rebates/refunds program would need to be administered

Revised Draft13 (continued) Would refunds be owed to the original applicant or the current owner at the time that another customer contribution is received? –DG customer business plans are developed on the basis of upgrade costs presented in the impact studies and agreed to in the interconnection agreement. Subsequent cost reimbursements would be a windfall and do not square with the benefit that the DG customer receives from capacity costs borne by ratepayers. Consistent treatment would require consideration of and allocation of ratepayer supported capacity additions to all DG customers.