FERC Approves Interconnection Process Reform Plan

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The Federal Energy Regulatory Commission on Tuesday approved PJM’s June 14, 2022, interconnection reform filing that proposed to implement a more efficient and timely process of handling New Service Requests by, among other reforms, transitioning from a “first-come, first-served” queue approach to a “first-ready, first-served” cycle approach. PJM’s reformed approach to handling New Service Requests also improves project cost certainty for network upgrades, and significantly improves the overall process by which new and upgraded generation resources are studied and introduced onto the electrical grid in 13 states and the District of Columbia.

FERC found that PJM’s proposed reforms (PDF) should provide the ability to reduce the current backlog more quickly than is possible under current rules and will ultimately result in more efficient and timely processing of New Service Requests. 

FERC also determined (PDF) that PJM’s proposed transition rules are a reasonable means of implementing queue reform, noting that they balance the interests of completing the interconnection study processes for mature interconnection requests under PJM’s current rules with the need to move expeditiously to a first-ready, first-served, clustered-cycle approach to clear the significant backlog and begin full implementation of the new rules. 

“This order is great news for the many stakeholders who worked on and supported this proposal, which will establish a new process to help move the energy transition forward,” said Ken Seiler, Vice President – Planning. “We thank FERC for acting expeditiously and look forward to beginning the transition in early 2023.”

The proposal was widely supported by PJM stakeholders, who had worked with PJM to develop the new rules since the April 2021 inception of the Interconnection Process Reform Task Force.

In the order, FERC agreed that more stringent site control requirements will discourage or prevent project developers from submitting speculative projects and, while the proposed site control requirements will add to the burden on prospective interconnection customers, those burdens will be outweighed by the benefits associated with decreasing the number of speculative interconnection requests entering PJM’s interconnection process. 

The approval is conditional on two compliance filings and a requirement to provide informational reports detailing PJM’s progress during a transition period:

  • PJM must submit a compliance filing within 30 days to include language in its Tariff confirming that only New Service Requests with no network upgrade cost allocation and no further studies required are eligible for project acceleration.
  • PJM must provide the eTariff effective date of the new rules no less than 60 days prior to the effective date of associated Tariff updates.

As renewable generation development has soared, the type of new projects has shifted from a limited number of large resources to hundreds of smaller renewable energy projects. As a result, the number of projects entering PJM’s New Services Queue has nearly tripled over the past four years.

Currently, PJM has more than 2,700 projects under study. More than 95% of the 250,000 proposed megawatts of generation are wind and solar, storage facilities, or hybrids of solar or wind with batteries. PJM annually studies more proposed interconnection projects than any other grid operator. The transition plan approved by FERC will prioritize about half of these projects, including a “fast-lane” process for projects to help clear the existing backlog. The transition phase is expected to be implemented in early 2023.