1. California Interconnection 101 An Update on Reform: What’s Happening and Why it is Important March 16, 2011 Sky C. Stanfield sstanfield@keyesandfox.com (510) 314-8204

2. Interconnection Issues Fundamental to solar development Complex web of procedures Backlog in interconnection queue Reform at CAISO, PG&E and SCE Possible Reform of Rule 21

3. Why Interconnection Matters Interconnection procedures govern how a solar system gets to connect to the grid so that the energy it produces can be used by others off-site. Fundamental to participation in the energy market

4. The Many Ways to Interconnect in California CAISO’s GIP (FERC) Utility WDATs (FERC) – PG&E – SCE – SDG&E Rule 21 (CPUC)

5. Three factors determine which procedure applies: Transmission or Distribution Location Wholesale or Net Metered System?

6. The Jurisdictional Debate FERC generally has jurisdiction over interconnection of wholesale systems CPUC has jurisdiction over QF interconnections to a utility distribution system when selling full output to the utility. –There is some debate about whether the CPUC has jurisdiction over interconnection of QFs that are not selling their full output to the utility CPUC also has jurisdiction over the connection of net metered systems –If AB 920 rate is avoided cost should be CPUC jurisdiction

7. Interconnection Pre-2011 CAISO and the IOUs previously had two sets of interconnection procedures –Larger Generators (LGIP) employing a cluster process –Small Generators (SGIP) used a serial study process They are now merging them into one set of procedures, known simply as the GIP

8. Why the Need for Change? Many more systems trying to interconnect than historically –RPS Goals –Emphasis on Distributed Generation (RAM, SB 32, IOU PV Programs) Interconnection speculation Lead to a clogged serial study queue

9. The New GIP From serial to clusters CAISO, SCE and PG&E (SDG&E??) Four Processes –Cluster Study –Independent Study Process (ISP) –Fast Track –10kw Inverter Process (not in CAISO)

10. The Cluster Study Essentially the same at CAISO, PG&E and SCE Any size project One study a year, two application windows Takes minimum of 510 days –Does not include time for upgrades –Assumes application filed last possible day A two study process- Phase I and II

11. Cluster Study Costs Higher upfront fees- $50,000 + 1,000/MW Financial Security Deposits –Due after Phase I and incrementally thereafter Potentially more equitable overall

12. Independent Study Process Any size project Can apply at any time- takes ½ a year Same application fees and deposits as the Cluster Must pass “Electrical Independence” Test CAISO Requires a Commercial Operation Date (COD) that cannot be met in the cluster study

13. Fast Track Size Restricted –CAISO- 5MW –PG&E- 5MW (3MW on 21kv, 2MW on 12kv) –SCE- 2MW Can apply at any time- takes just over a month Lower fees Must pass 6 to 10 screens Improved by allowing some construction of interconnection facilities

14. What’s the Fuss About? Cluster study takes 18 months Most Wholesale DG Programs require 18 months to COD Limited applicability of expedited processes High upfront costs of participation Variation on key aspects amongst programs

15. Rule 21 CPUC jurisdictional Principally used for net metered systems Three Components: –Simplified interconnection –Supplemental review –Study process

16. Rule 21’s Limitations No-export screen: –Screen 2: Will power be exported across the PCC? If Yes, Generating Facility does not qualify for Simplified Interconnection If screens are failed move to supplemental review and/or full study Full study process has no defined parameters on cost or timing

17. Rule 21 vs. WDAT Issue raised in SB32 PG&E proposing use of WDAT for all QF interconnections Will Rule 21 reform take on the study process?

18. On the Radar SCE and PG&E’s FERC filings Will SDG&E start reform? Rule 21 reforms CAISO has started GIP Reform II

19. IREC Resources Sky Stanfield sstanfield@keyesandfox.com www.irecusa.org