The Surplus Interconnection Service Act
Draft Disclaimer
Prior to task force meetings, ALEC posts these legislative member-submitted draft model policies to our website. The draft model policies are then discussed, debated, and voted on by ALEC task force members. Policies that receive final approval by legislators on the ALEC Board of Directors become official ALEC model policy. Draft model policies that fail to become official ALEC model policy are removed from the website.
Summary
This model policy requires electric utilities to evaluate technically feasible opportunities to use existing, unused transmission interconnection capacity as a near-term option for meeting identified electricity needs. It directs utilities to screen qualifying surplus interconnection service in integrated resource plans, requires the state utility commission to consider that analysis when technically applicable to a generation proposal, and establishes a focused commission study and public report. The policy preserves utility operational control, protects confidential and security-sensitive information, avoids duplicative regulatory work, and does not expand commission jurisdiction or authorize automatic project approval or cost recovery.Model Policy
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF [STATE]:
Section 1. Short Title.
This Act shall be known and may be cited as the “Surplus Interconnection Service Act.”
Section 2. Definitions. As used in this Act:
(a) “Commission” means the State Public Utility Commission or equivalent regulatory authority.
(b) “Electric utility” means an electric public utility subject to the jurisdiction of the Commission that owns or operates an electric generating facility and is required by state law or Commission rule to submit an integrated resource plan.
(c) “Integrated resource plan” means a utility resource-planning filing required by state law or Commission rule that evaluates the resources reasonably available to meet forecasted electricity demand.
(d) “Interconnection service” means a service that:
- is established in a standard large generator interconnection agreement, as defined in the Federal Energy Regulatory Commission’s pro forma Large Generator Interconnection Procedures, for an electric generating facility with a generating facility capacity of more than twenty (20) megawatts;
- is provided by an electric transmission provider; and
- is associated with interconnecting an electric generating facility with the transmission provider’s transmission system and enabling the transmission system to receive electric energy and capacity from the generating facility at the point of interconnection.
(e) “Surplus interconnection service” means any portion of interconnection service that:
- is not currently being utilized;
- is not reasonably expected to be needed for the existing generating facility’s planned operations, reliability requirements, or reasonably anticipated future needs; and
- may be utilized without increasing the total amount of interconnection service authorized at the point of interconnection.
(f) “Third-party facility,” with respect to an electric utility, means an electric generating facility that is not owned or operated by the electric utility or an affiliate of the electric utility.
Section 3. Integrated Resource Plan Analysis.
(a) An electric utility required by state law or Commission rule to submit an integrated resource plan shall evaluate commercially available and technically feasible opportunities to utilize surplus interconnection service as part of such plan, consistent with the requirements of this section.
(b) An electric utility not required to submit an integrated resource plan shall consider commercially available and technically feasible opportunities to utilize surplus interconnection service as part of any otherwise applicable generation planning, transmission planning, infrastructure investment, or regulatory approval process within the jurisdiction of the Commission.
(c) Evaluations conducted under this section shall consider whether surplus interconnection service could facilitate additional generation capacity, reduce interconnection costs, shorten development timelines, or provide cost-effective alternatives to new transmission infrastructure.
(d) In conducting an evaluation under this section, an electric utility or the Commission, as applicable and within its existing jurisdiction, may consider information voluntarily provided by independent power producers, transmission providers, regional transmission organizations, or independent system operators concerning commercially available and technically feasible opportunities to utilize surplus interconnection service.
(e) Nothing in this section shall require an electric utility to establish an integrated resource planning process or create additional regulatory filing requirements where none otherwise exist.
Section 4. Commission Review of Generation Proposals.
When technically applicable, in acting on an application or petition for the construction, purchase, or lease of an electric generating facility filed after [DATE], the Commission shall consider:
(a) whether the applicant has conducted an analysis, as part of an integrated resource plan under Section 3 or otherwise, of the use of surplus interconnection service as an alternative to, or in conjunction with, the proposed construction, purchase, or lease; and
(b) whether the proposed construction, purchase, or lease will make use of, or allow for the use of, surplus interconnection service.
This section does not create a separate condition precedent to Commission consideration or approval of an application or petition.
Section 5. Commission Study and Report.
(a) The Commission shall conduct a study to evaluate the potential use of surplus interconnection service by electric utilities to enable electric utilities to:
- safely, reliably, efficiently, and cost-effectively meet electric system demand; and
- provide safe, reliable, and affordable electric utility service to customers.
(b) In conducting the study, the Commission shall evaluate:
- the potential use of surplus interconnection service to enable electric utilities to provide safe, reliable, and affordable electric utility service to customers in this state, considering existing and planned transmission infrastructure and projected demand growth; and
- any other aspect of surplus interconnection service that the Commission determines will assist policymakers, electric utilities, ratepayers, and other stakeholders in understanding the potential role of surplus interconnection service in the transmission system serving this state and the region.
(c) An electric utility shall provide information or related materials that are reasonably necessary to perform the evaluation described in subsection (b), within the utility’s possession or control, and not unduly burdensome or duplicative of information otherwise available to the Commission. If the utility has solicited information concerning third-party facilities under Section 3(c), the Commission may request such reasonably necessary information directly from the owners or operators of those facilities, subject to the same limitations.
(d) Trade secrets, proprietary business information, cybersecurity information, critical energy infrastructure information, and other information protected from disclosure under applicable state or federal law shall be treated as confidential and protected from public access and disclosure by the Commission without requiring a separate request for confidential treatment.
(e) In conducting the study, the Commission may consult with or invite comments from:
- regional transmission organizations or independent system operators;
- the Federal Energy Regulatory Commission or other federal regulators;
- electric utilities;
- the State Office of Utility Consumer Advocate or equivalent office;
- associations or organizations representing utility ratepayers;
- regulatory commissions in other states;
- engineers or other experts; and
- other stakeholders. The Commission may incorporate information or comments received under this subsection in the report required by subsection (f).
(f) Not later than fifteen (15) months after the effective date of this Act, the Commission shall submit to the Governor and the Legislature, and publish on the Commission’s public website, a report containing the Commission’s findings regarding the topics set forth in subsection (b).
(g) The Commission may rely on existing Commission, utility, regional transmission organization, independent system operator, federal agency, or national laboratory proceedings, studies, and information to satisfy this section. The Commission shall avoid duplicative reporting and shall implement this section using existing personnel and appropriations.
Section 6. Construction.
Nothing in this Act shall be construed to:
(a) expand the jurisdiction of the Commission;
(b) supersede an applicable federal law, tariff, interconnection agreement, or requirement of a regional transmission organization or independent system operator;
(c) compel the transfer of interconnection rights or require an electric utility to take an action that would compromise safety, reliability, cybersecurity, or operational control;
(d) require disclosure of trade secrets, proprietary business information, cybersecurity information, critical energy infrastructure information, or other information protected by law;
(e) authorize the use of interconnection service in excess of the total amount established for a facility under the applicable interconnection agreement and tariff;
(f) create a private right of action; or
(g) authorize automatic approval or cost recovery for any project or investment.
Section 7. Severability.
If any provision of this Act or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.
Section 8. Effective Date.
This Act takes effect on [EFFECTIVE DATE]