Efficient Grid Interconnection Act of 2021
Bill: H.R.4027 | Sponsor: Rep. Castor, Kathy (D-FL)
Policy area: Energy

Summary:
Efficient Grid Interconnection Act of 2021
This bill establishes requirements concerning (1) the equitable allocation of costs for electric grid upgrades; and (2) the deployment of grid enhancing technology or equipment that increases the capacity, efficiency, or reliability of a transmission facility or transmission system.
Specifically, it directs the Federal Energy Regulatory Commission (FERC) to issue regulations that require public electric utilities to allocate the cost of upgrades to the electric grid, such as upgrades to interconnect renewable generation projects, among all customers that benefit from the upgrades. In determining which parties benefit, FERC must consider all material benefits of the network upgrade, including environmental benefits and those that cannot be directly quantified.
In addition, FERC must issue regulations that apply to regional transmission organizations, independent system operators, or transmission planning coordinators when they are processing requests to interconnect generation projects or energy storage projects to the electric grid. The regulations must require such organizations, operators, and coordinators to study deploying technology or equipment that increases the capacity, efficiency, or reliability of a transmission facility or transmission system.

To facilitate the generation and delivery of power from affordable and 
  reliable renewable generation projects and energy storage projects.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; DEFINITIONS.

    (a) Short Title.--This Act may be cited as the ``Efficient Grid 
Interconnection Act of 2021''.
    (b) Definitions.--In this Act:
            (1) Commission.--The term ``Commission'' means the Federal 
        Energy Regulatory Commission.
            (2) Energy storage project.--The term ``energy storage 
        project'' means equipment which receives, stores, and delivers 
        energy using batteries, compressed air, pumped hydropower, 
        hydrogen storage (including hydrolysis), thermal energy 
        storage, regenerative fuel cells, flywheels, capacitors, 
        superconducting magnets, or other technologies identified by 
        the Secretary of Energy, and which has a capacity of not less 
        than 5 kilowatt hours.
            (3) Generation project.--The term ``generation project'' 
        means any facility--
                    (A) that generates electricity; and
                    (B) the interconnection request of which is subject 
                to the jurisdiction of the Commission.
            (4) Generator tie line.--The term ``generator tie line'' 
        means a dedicated transmission line that is used to transmit 
        power from a generation project or an energy storage project to 
        a transmission facility or a transmission system.
            (5) Grid enhancing technology.--The term ``grid enhancing 
        technology'' means any technology or equipment that increases 
        the capacity, efficiency, or reliability of a transmission 
        facility or transmission system, including--
                    (A) power flow control and transmission switching 
                equipment;
                    (B) energy storage technology;
                    (C) topology optimization technology;
                    (D) dynamic line rating technology; and
                    (E) other advanced transmission technologies, such 
                as composite reinforced aluminum conductors or high 
                temperature superconductors.
            (6) Interconnection customer.--The term ``interconnection 
        customer'' means a person or entity that has submitted a 
        request to interconnect a generation project or an energy 
        storage project that is subject to the jurisdiction of the 
        Commission to the owner or operator of a transmission facility 
        or a transmission system.
            (7) Network upgrade.--The term ``network upgrade'' means--
                    (A) any modification of, addition to, or expansion 
                of any transmission facility or transmission system;
                    (B) the construction of a new facility that will 
                become part of a transmission system;
                    (C) the addition of an energy storage project to a 
                transmission facility or a transmission system; and
                    (D) any construction, deployment, or addition of 
                grid enhancing technology to a transmission facility or 
                a transmission system that eliminates or reduces the 
                need to carry out any of the activities described in 
                subparagraphs (A) through (C).
            (8) Participant funding.--The term ``participant funding'' 
        means any cost allocation method under which an interconnection 
        customer is required to pay, without reimbursement, all or a 
        disproportionate amount of the costs of a network upgrade that 
        is determined to be necessary to ensure the reliable 
        interconnection of the interconnection customer's generation 
        project or energy storage project.
            (9) Public utility.--The term ``public utility'' has the 
        meaning given such term in section 201(e) of the Federal Power 
        Act (16 U.S.C. 824(e)).
            (10) Renewable generation project.--The term ``renewable 
        generation project'' means a generation project that generates 
        electricity from a renewable energy resource, including wind, 
        solar, geothermal, and hydropower.
            (11) Regional transmission organization; independent system 
        operator.--The terms ``Regional Transmission Organization'' and 
        ``Independent System Operator'' have the meanings given such 
        terms in section 3 of the Federal Power Act (16 U.S.C. 796).
            (12) Transmission system.--The term ``transmission system'' 
        means a network of transmission facilities used for the 
        transmission of electric energy in interstate commerce.

SEC. 2. SENSE OF CONGRESS.

    It is the sense of Congress that--
            (1) in much of the United States renewable generation 
        projects and energy storage projects face unfair and 
        inefficient barriers to Commission-jurisdictional 
        interconnection with the electric grid;
            (2) legislation is needed to accelerate the timely and 
        efficient interconnection of renewable generation projects and 
        energy storage projects, and to ensure that individual 
        interconnection customers are not forced to bear 
        disproportionate amounts of shared network upgrade costs;
            (3) network upgrades required to be constructed to 
        interconnect renewable generation projects and energy storage 
        projects benefit all transmission system customers as well as 
        parties that receive power delivered over such transmission 
        systems;
            (4) the practice of exclusive or disproportionate 
        participant funding, whereby the costs of network upgrades are 
        assigned solely or disproportionately to individual 
        interconnection customers, is unduly discriminatory, harmful to 
        consumers, and not in the public interest;
            (5) in certain cases, the deployment of grid enhancing 
        technologies can substitute for, and thereby reduce the need 
        for, time required, or cost to construct, a traditional 
        transmission upgrade or addition, such as modifying or adding a 
        conductor or substation element, that otherwise would be 
        required to interconnect a new generation project or energy 
        storage project;
            (6) by reducing the need for, and the time necessary to 
        construct, a traditional transmission upgrade or addition, such 
        as modifying or adding a conductor or substation element, the 
        deployment of grid enhancing technologies would facilitate 
        timely, efficient, and cost-effective interconnections, and the 
        renewable generation projects and energy storage projects 
        dependent on those interconnections, and the delivery of clean 
        and reliable electricity produced by those projects; and
            (7) collectively, the development and construction of 
        renewable generation projects, energy storage projects, and 
        grid enhancing technologies should create tens of thousands of 
        family-sustaining jobs, facilitate rural economic development, 
        enhance Federal and State tax revenues, and further the timely 
        and cost-effective delivery of clean, affordable, and reliable 
        electricity.

SEC. 3. EQUITABLE COST ALLOCATION.

    (a) In General.--Not later than 180 days after the date of 
enactment of this Act, the Commission shall issue a new regulation, or 
revise existing regulations, to prohibit the use of exclusive or 
disproportionate participant funding.
    (b) Allocation of Costs.--
            (1) In general.--In prohibiting the use of exclusive or 
        disproportionate participant funding under subsection (a), the 
        Commission shall, except as provided in paragraph (4), require 
        that each public utility--
                    (A) may not allocate the costs of a network upgrade 
                solely to the requesting interconnection customer; and
                    (B) shall reasonably allocate such costs to parties 
                that--
                            (i) use the transmission facility or the 
                        transmission system;
                            (ii) take electricity from the transmission 
                        facility or the transmission system; or
                            (iii) otherwise benefit from a network 
                        upgrade of the transmission facility or the 
                        transmission system.
            (2) Interconnection to multiple transmission systems.--With 
        respect to a network upgrade that is associated with a 
        generation project or an energy storage project that has a 
        significant impact on two or more transmission systems, the 
        costs for such a network upgrade shall be allocated pursuant to 
        a methodology designed jointly by the impacted transmission 
        systems to ensure that all such costs are equitably shared by 
        the parties that benefit from such network upgrade.
            (3) Determination of benefitting parties.--In determining 
        which parties benefit for purposes of paragraph (1)(B)(iii) and 
        paragraph (2), the Commission shall consider all material 
        benefits of the network upgrade, including--
                    (A) those that cannot be directly quantified, 
                including resilience benefits; and
                    (B) environmental benefits, including reduced and 
                avoided emissions of greenhouse gases and conventional 
                air pollutants.
            (4) Generator tie lines.--A public utility may require an 
        interconnection customer to pay for the costs of construction 
        of any generator tie lines that will be used to transmit power 
        from the interconnection customer's generation project or 
        energy storage project, as applicable, to the transmission 
        facility or the transmission system.
            (5) Voluntary payment.--
                    (A) In general.--An interconnection customer may 
                pay upfront some or all of the costs of a network 
                upgrade at the transmission facility or transmission 
                system to which they plan to interconnect their 
                generation project or energy storage project in 
                accordance with subparagraph (B).
                    (B) Repayment.--Any interconnection customer that 
                pays costs under subparagraph (A) shall be refunded 
                such costs allocable to other parties pursuant to the 
                Commission's regulations issued or revised under this 
                section, over a period that is not longer than 10 years 
                beginning on the date on which the interconnection 
                customer's interconnection is complete.
            (6) Updating procedures.--Not later than the date that is 3 
        months after the date on which the Commission issues or revises 
        regulations as required under subsection (a), each public 
        utility shall make a filing pursuant to section 205 of the 
        Federal Power Act (16 U.S.C. 824d) to amend their 
        interconnection procedures to comply with such regulations.

SEC. 4. DEPLOYMENT OF GRID ENHANCING TECHNOLOGIES.

    Not later than 180 days after the date of enactment of this Act, 
the Commission shall issue a new regulation, or revise existing 
regulations, to require the following:
            (1) Consultation.--
                    (A) In general.--With respect to processing a 
                request to interconnect a generation project or an 
                energy storage project, the Regional Transmission 
                Organization, Independent System Operator, or 
                transmission planning coordinator, as applicable, 
                shall--
                            (i) consult with the relevant owner of the 
                        transmission facility or transmission system, 
                        and the interconnection customer, regarding 
                        deploying grid enhancing technology in addition 
                        to, or as a substitute to, carrying out a 
                        traditional transmission upgrade or addition, 
                        such as modifying or adding a conductor or 
                        substation element; and
                            (ii) study the efficacy of deploying grid 
                        enhancing technology for the purposes described 
                        in clause (i).
                    (B)  Unconnected transmission facilities.--With 
                respect to a request to interconnect a generation 
                project or an energy storage project to a transmission 
                facility that is not connected to a transmission 
                system, the owner or operator of such a facility 
                shall--
                            (i) consult with the interconnection 
                        customer regarding deploying grid enhancing 
                        technology in addition to, or as a substitute 
                        to, carrying out a traditional transmission 
                        upgrade or addition, such as modifying or 
                        adding a conductor or substation element; and
                            (ii) study the efficacy of deploying grid 
                        enhancing technology for the purposes described 
                        in clause (i).
            (2) Deployment.--
                    (A) In general.--An interconnection customer that 
                is consulted with under paragraph (1) may request that 
                grid enhancing technology that was the subject of such 
                consultation be deployed.
                    (B) Determination.--The owner of the transmission 
                facility or transmission system to which such 
                technology would be deployed shall determine whether to 
                deploy such technology, subject to an appeal under 
                subparagraph (C).
                    (C) Appeal.--
                            (i) In general.--An interconnection 
                        customer that requests deployment of grid 
                        enhancing technology under subparagraph (A) may 
                        submit to the Commission a request for a 
                        hearing to appeal the decision under 
                        subparagraph (B) to not deploy grid enhancing 
                        technology.
                            (ii) Effect of appeal.--After a hearing 
                        under clause (i), the Commission may order the 
                        owner of the transmission facility or 
                        transmission system to deploy the grid 
                        enhancing technology requested under 
                        subparagraph (A).
            (3) Updating procedures.--Not later than the date that is 3 
        months after the date on which the Commission issues or revises 
        regulations as required under this section, each public utility 
        shall make a filing pursuant to section 205 of the Federal 
        Power Act (16 U.S.C. 824d) to amend their interconnection 
        procedures to comply with such regulations.
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