The Federal Energy Regulatory Commission on Tuesday approved two PJM proposals to help boost the supply of electricity as the grid operator continues to work on the longer-term challenge of growing the generation fleet to keep up with growing electricity demand.
The Reliability Resource Initiative (RRI) is designed to get shovel-ready, high-reliability projects connected faster by adding them to the final transition cycle (Transition Cycle #2) of PJM’s reformed interconnection process, rather than waiting for the new cycle interconnection process to be fully implemented next year. The proposal (PDF) was filed with FERC Dec. 13, 2024.
“This one-time initiative should provide a much-needed on-ramp to the reliability of the PJM system in the short term as we continue to move existing queued projects through our transition cycles,” said Chris O’Hara, Sr. Vice President and General Counsel. “We now hope to see suppliers take advantage of this unique opportunity.”
The second initiative aims to streamline the use of Surplus Interconnection Service (SIS), or the unused portion of interconnection service for a facility that cannot or does not operate continuously, every hour of every day year-round. An example of a pairing using SIS is a renewable resource combined with battery storage.
“By taking a less-restrictive approach to SIS, PJM will be in a better position to utilize existing system capability and existing interconnections that do not require additional network upgrades,” said Aftab Khan, PJM Executive Vice President – Operations, Planning & Security.
PJM has been warning for the past several years of a growing risk of not having enough electricity to support surging demand, as detailed in the report, Energy Transition in PJM: Resource Retirements, Replacements & Risks (PDF). A capacity shortage may affect the PJM system as early as the 2026/2027 Delivery Year, when the 2025 Long-Term Load Forecast is taken into account, PJM Board Chair Mark Takahashi noted in a Dec. 9 letter to stakeholders (PDF).
The Reliability Resource Initiative and Surplus Interconnection Service initiatives are among a bundle of initiatives that PJM and its members are taking to address the emerging circumstances and that have been submitted to FERC (see PJM Board Supports Action in Support of Urgent Grid Reliability Needs).
Next Steps
The application window for RRI projects opens Feb. 28 and closes March 14.
After public discussions with members, PJM made several changes to the RRI proposal, including restricting the number of projects to about 50 to avoid detracting from about 550 projects already being studied as part of PJM’s final Interconnection Process Reform transition cycle.
PJM’s widely supported interconnection process reform, which started in July 2023, will have processed over 200,000 MW in generation projects by the time it is complete in 2026. There are now approximately 50,000 MW in projects that are through the PJM study process and ready for construction, interconnection and operation.
The RRI process is open to generation interconnection requests from all types of resources with a minimum 10 MW of unforced capacity (UCAP), or the capacity value that a generation resource can be expected to contribute to PJM. There is no cap on applications.
The proposals will be scored according to market impact criteria (UCAP, Effective Load Carrying Capability and zonal need) and commercial operation date viability.
If a project is not selected, the RRI and readiness deposits are fully refundable; the Study Deposit is refundable less actual cost. The RRI application review is expected to be completed in Q2 of this year, when the projects will join Transition Cycle #2. The approved changes to the SIS process, effective March 7, will allow new generators that do not trigger transmission system upgrades to use an existing generator’s unused interconnection capability and avoid being processed through the generation interconnection queue. This filing (PDF) was made Dec. 20.