California ISO grants more flexibility for power project downsizing

The California Independent System Operator’s Board of Governors approved changes Nov. 7 designed to help power plant developers better react to changing business conditions that trigger project downsizings, which often occur with highly scalable renewable generators.

The  changes provide an annual process for developers to submit a request to reduce the megawatt size of their project for any reason beginning in October 2014. The changes will allow developers to adapt projects to fit within a more flexible business model.

“Building wind and solar generation or any type of power plant can take five to seven years and the business climate can change significantly during that time span,” said CAISO Vice President, Market and Infrastructure Development Keith Casey. “These enhancements to our interconnection queue enable developers to complete projects without being subjected to risks beyond their control.”

Allowing this flexibility means developers no longer face the threat of an interconnection agreement being terminated by the ISO for failing to meet original specifications. To further address the concern, the ISO clarified that it will not terminate a project solely because of a failure to complete the project at the size originally proposed, provided the developers participate in the annual downsizing program.

When generation projects decide to downsize, it can affect other projects in the queue by changing the scope and costs of the network upgrades required, CAISO noted. Therefore, it will study the combined impacts of each year’s downsizing requests within the annual generator interconnection process.

To offset possible effects on other developers, downsized projects will be obligated to finance the cost of any network upgrades that resulted from the original project size. In addition, developers modifying the size of projects will provide a $60,000 deposit toward the costs incurred by the ISO and the transmission owners to perform and administer the annual downsizing window.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.