On July 29, 2020, the Virginia State Corporation Commission (the “Commission”) issued an Order[1] (the “Order”) revising the Regulations Governing Interconnection of Small Electrical Generators, 20 VAC 5-314-10 et seq. (the “Interconnection Regulations”). The Interconnection Regulations apply to “utilities providing interconnections to retail electric customers, independently owned generators, and any other parties operating, or intending to operate, a distributed generating facility in parallel with utility systems.”[2]
By its Order, the Commission made numerous revisions to the Interconnection Regulations (the “Revised Regulations”). Specifically, the Revised Regulations (among other changes):
The Revised Regulations are effective October 15, 2020, as further described below.
Background
The Commission adopted the existing Interconnection Regulations on May 8, 2009.[3] In September 2018[4], the Commission initiated a rulemaking “to determine whether, and the extent to which, any of the Interconnection Regulations should be revised.” The Commission decided to consider revisions to the Interconnection Regulations “[g]iven the passage of time since the Commission established the Interconnection Regulations, recent changes in applicable laws and Federal Energy Regulatory Commission (“FERC”) guidelines, and technological changes in the power industry.” In addition, utilities and developers had expressed concern about certain aspects of the existing Interconnection Regulations.
During the rulemaking process, several parties submitted comments, including Virginia Electric and Power Company (Dominion), the Virginia, Maryland & Delaware Association of Electric Cooperatives and a few solar developers. The Commission’s rulemaking process culminated in the issuance of its Order adopting the Revised Regulations.
Summary of Certain Revisions
While the Commission made several revisions to the Interconnection Regulations, a copy of which is available here, a few notable changes include:
Request Level |
Capacity Limit |
Fee / Deposit |
Level 1 |
500 kW or less |
$100 processing fee |
Level 2 (not qualifying for Level 1) |
2 MW or less |
$1,000 processing fee |
Level 3 (not qualifying for Level 1 |
Above 2 MW |
$1,000 processing fee and $10,000 plus $1.00 per kWAC interconnection |
Applicability of the Revised Regulations
The Revised Regulations are effective October 15, 2020 and do not apply to SGFs already interconnected as of October 15, 2020, unless (a) an IC proposes a material modification, or (b) the utility and IC agree in writing. The Revised Regulations apply if the IC has not actually interconnected the SGF as of October 15, 2020.
Any IC that has not executed an IA with the utility prior to October 15, 2020 has 30 days following the later of (i) October 15, 2020, or (ii) the posted date of notice in writing from the utility to (a) demonstrate site control, (b) execute a combined study agreement or individual revised study agreements, and (c) post the deposit specified in the Revised Regulations (minus any study costs previously paid).
Any IC that has executed an IA with the utility prior to October 15, 2020, but where the utility has not actually interconnected the SGF or where the IC has not begun making payments, has 60 days following the later of (i) October 15, 2020 or (ii) the posted date of notice in writing from the utility, to submit upgrade and interconnection facility payments (or financial security acceptable to the utility for attachment facilities and distribution upgrades). Any amount previously paid by the IC at the time of deposit or payment is to be credited toward the deposit amount or other payment required.
If an IC fails to comply following written notice (and 10 business day cure period, following notice from the utility), the IC will lose its queue number, and the interconnection request will be deemed withdrawn.
For more information about the Revised Regulations, please contact Brad Nowak, co-Chair of Williams Mullen’s Solar and Energy Storage team.
[1] On August 3, 2020, the Commission amended the July 29, 2020 Order to correct an error in 20 VAC 5-314-39 C of the Revised Regulations.
[2] 20 VAC 5-314-10.
[3] The Interconnection Regulations are promulgated in accordance with Virginia Code § 56-578.
[4] Commonwealth of Virginia, ex rel. State Corporation Commission, Ex Parte: In the matter of revising the Commission’s Regulations Governing Interconnection of Small Electrical Generators, Case No. PUR-2018-00107 (September 5, 2018).