Oregon Commission Issues Order in Docket No. UM 2032 Related to Network Upgrade Cost Allocation and Interconnection Service for QFs

On January 20, 2023, the Oregon Public Utility Commission (Commission) released an order in Docket No. UM 2032 related to network upgrade cost allocation and interconnection service for qualifying facilities (QFs). The Commission directed Commission Staff to open an informal rulemaking related to state-jurisdictional transmission planning. The Commission also directed the utilities to accept an interconnection service besides Network Resource Integration Service (NRIS) if the QF will negotiate a non-standard contract and consent to curtailment.  The first issue in the proceeding was about who should pay for network upgrades necessitated by the interconnection of a QF: the QF or the utility and its customers. The Commission’s current policy is that an interconnecting QF is responsible for network upgrade costs, but it allows for the possibility of a cost shift to the utility if there are quantifiable system-wide benefits associated with the network upgrades. The Commission affirmed this policy but directed Staff to open an informal rulemaking to address the transparency issues associated with state-jurisdictional transmission and system planning. Because the Commission affirmed its current policy, the Commission declined to open a Phase II of the proceeding to address the quantifiable system-wide benefits test.

The second issue in the proceeding was whether on-system QFs should be required to interconnect to utilities using NRIS or whether on-system QFs should have the option to interconnect using Energy Resource Interconnection Service (ERIS). NRIS is the ability to safely and reliably interconnect and deliver power to the utility’s load while ERIS is the ability to safely and reliably interconnect only. The Commission recognized the value of efficiently optimizing the existing transmission system. The Commission concluded on-system QFs should be allowed to interconnect using an interconnection service other than NRIS in certain circumstances. The Commission also confirmed that a QF has the ability to be studied for NRIS and ERIS.

The Commission directed the following four actions:
• The utilities are directed to make clear, on a going forward basis, that avoided Network Upgrade costs are included in avoided cost calculations.
• Staff is directed to open an informal rulemaking docket to examine opportunities to improve the production and availability of information about the utility transmission and system planning processes, such that there will be greater transparency about which Network Upgrades are likely to bring high priority benefits to the utility’s system as a whole.
• The utilities are directed to develop and make filings, as necessary, to facilitate a QF’s ability to pay for both ERIS and NRIS analysis.
• The utilities are directed to negotiate a non-standard contract implementing a QF’s decision, after review of both ERIS and NRIS reports, to interconnect with a host utility using ERIS, so long as the QF voluntarily commits to allow curtailment at a level that obviates the need for the Network Upgrades identified in a NRIS report.

Sanger Law, PC represented the Northwest & Intermountain Power Producers Coalition (NIPPC) and the Renewable Energy Coalition (REC) in this proceeding.

NIPPC represents electricity market participants in the Pacific Northwest, including independent power producers, electricity service suppliers, and transmission companies. NIPPC is committed to facilitating cost-effective electricity sales, offering consumers choices in their energy supply, and advancing fair, competitive power markets.

REC advocates for reasonable Public Utility Regulatory Policies Act and interconnection policies on behalf of renewable qualifying facilities that are located in Idaho, Montana, Oregon, Utah, Washington, and Wyoming.

These materials are intended to as informational and are not to be considered legal advice or legal opinion, nor do they create a lawyer-client relationship. Information included about previous case results does not assure a similar future result.