On October 31, 2017, FERC accepted proposed revisions to the ISO New England, Inc. (“ISO-NE”) Transmission, Markets and Services Tariff (“Tariff”) to incorporate a methodology for interconnection request cluster studies, which were filed by ISO-NE, the New England Power Pool Participants Committee, and the Participating Transmission Owners Administrative Committee on behalf of the Participating Transmission Owners (collectively, the “Filing Parties”). Under the new revisions, which became effective on November 1, 2017, interconnection requests for resources located in the same electrical part of the ISO-NE system and that meet certain other criteria, will be studied together, as opposed to individually. As part of the stakeholder discussions preceding the filing, ISO-NE developed a strategic infrastructure study to identify the transmission upgrades needed to interconnect remotely-located wind resources in Maine, which will serve as the first cluster study to proceed under the newly-accepted methodology.

ISO-NE’s interconnection procedures normally utilize a serial study approach to identify both the network upgrades and interconnection facilities needed to accommodate interconnection requests on a first-ready, first-served basis. Under this methodology, after various studies are completed and the customer and ISO-NE execute an interconnection agreement, ISO-NE directly assigns to the interconnection customer the costs of the network upgrades that would not have occurred “but for” the interconnection.

According to the Filing Parties, the serial study approach works well throughout most of ISO-NE, with the exception of northern and western Maine—an area in which several wind resources are requesting interconnection. The Filing Parties noted that, because ISO-NE’s system in northern and western Maine was built to serve minimal load, significant transmission infrastructure upgrades are needed to accommodate the wind resources’ interconnection requests. However, due to ISO-NE’s policy of directly assigning the costs for such upgrades on the first interconnection customer to be interconnected, many wind resources seeking interconnection have been unable or unwilling to make the necessary investments.

ISO-NE and its stakeholders developed the proposed cluster study Tariff revisions to address this problem, and initiated a sample cluster study for the Maine wind resources that could proceed pending FERC approval of the Tariff revisions. Under the proposed changes, ISO-NE will maintain its usual serial study approach, but a cluster study will be triggered when several conditions are present. First, there must be two or more interconnection requests in the same electrical part of the ISO-NE system based on the requested point of interconnection. Second, none of the requests must have a completed system impact study. Finally, none of those interconnection requests must be able to interconnect, either individually or together, without certain common new transmission infrastructure rated at or above certain high voltage levels.

Once these conditions are met, a two-phase cluster study is triggered, with the first phase generally providing in-depth information about the magnitude and estimated cost of the transmission infrastructure needed to accommodate the clustered request, as well as an opportunity to participate in the cluster study process for resources meeting the conditions noted above. In the second phase, ISO-NE performs a “Cluster System Impact Study” that identifies, among other things, certain “Cluster Enabling Transmission Upgrades” necessary to enable all participating interconnection customers to interconnect, the costs for which are allocated to each clustered customer based on a pro-rata methodology. Customers that do not join the cluster, can either move to the bottom of the interconnection queue and be studied serially, or withdraw their interconnection requests.

Various parties protested certain parts of ISO-NE’s cluster study proposal, arguing, for example, that cluster study could give undue preference to incumbent utilities in developing the transmission upgrades identified through the cluster study process, or that the proposal will not accommodate all of the backlogged resources in Maine.

In its order accepting the cluster study proposal, FERC found that the proposal would increase efficiencies, better inform the decisions of project developers, and allow such developers to share the costs of common upgrades necessary to accommodate their interconnection. FERC was either unpersuaded by the various protests, or found ISO-NE’s proposal to generally address them.

A copy of FERC’s order can be found here.