Now awaiting action before the Virginia State Corporation Commission, the concept tries to resolve what’s known as the “last man standing” practice, which can heap massive costs on one developer. This happens when DER projects use up all of the hosting capacity at a location on a utility’s distribution grid, requiring physical upgrades to poles, wires, substations and software before any other projects can interconnect.
In Virginia and other states, the utility customarily charges all of the upgrade costs to the next project in line — the one that triggered the need — even though those that interconnected earlier caused the problem and those that interconnect later will benefit from the upgrade.
Under the Virginia DER tariff proposal, utilities would levy a small charge on all DER producers to cover the upgrade with the intent of keeping costs equitable and low for interconnection — an approach that has yet to be tried in other states.
“No one would be faced with a million-dollar interconnection requirement,” said Josephus Allmond, staff attorney at the Southern Environmental Law Center.