The California Independent System Operator’s (CAISO) Board of Governors approved a proposal October 28 to speed transmission-grid connections for large electricity customers, including data centers and manufacturing facilities. The proposal would allow some customers to receive electricity before associated transmission upgrades are complete, subject to operating limits intended to protect grid reliability and other customers.
CAISO plans to submit the proposed tariff changes to the Federal Energy Regulatory Commission (FERC) by November 16. The changes are not yet in effect and require federal review.
Flexible interim connections
The proposed framework would create a flexible interim load interconnection service for large customers connecting to the CAISO-controlled transmission grid. The proposal uses a threshold of at least 50 megawatts of peak demand, though CAISO is still working with PG&E and other stakeholders on the definition of a large load.
Under the interim service, customers could begin receiving electricity earlier where transmission capacity and reliable operating controls permit. Depending on grid conditions, those controls could include preset operating schedules, curtailment by the transmission owner, or automated remedial-action systems. CAISO would not enable a remedial-action option if it could not be operated reliably or created significant market problems.
The proposal also establishes a monthly review process for large-load requests involving transmission additions or upgrades outside the regular planning cycle. The process is intended to support transmission owners’ 60-to-90-day timeframe for interconnection studies.
Reliability and cost allocation
CAISO would require large customers to provide hourly demand forecasts, telemetry, and other operational information. The proposal also calls for communication protocols that would allow CAISO to coordinate with transmission owners and remotely disconnect large loads when necessary to maintain reliability.
For large loads located with on-site generation, the proposal would establish parallel information and application requirements, clarify how the generation would be studied, and require submetering to account for transmission services used by the load.
To address cost shifting, the proposal would publicly disclose aggregate large-load additions by transmission pricing zone, planned network upgrades needed to serve them, and estimated upgrade costs. It also contemplates cost-recovery agreements among transmission owners and eligible customers, with CAISO included in some cases.
Implications for California
The proposal comes as utilities evaluate large data-center projects and state regulators consider how to assign infrastructure costs associated with growing electricity demand. Faster interconnection could improve project timelines for data centers and manufacturers, but interim service could come with operating limits that affect customers requiring uninterrupted power.
The proposal responds to a June FERC order directing CAISO and five other regional grid operators, along with their transmission owners, to show that their procedures can accommodate large loads without compromising reliability or shifting costs to other customers.
FERC’s review will determine whether the proposed tariff provisions can proceed. CAISO expects to consider permanent flexible connections and arrangements involving electrically proximate loads and generation in future stakeholder work.