Approval of PJM Queue Reform;
3-Year Pause on New Projects

By Christian Roselund

On 29 November 2022 federal regulators approved a proposal by the nation’s largest grid operator to reform its interconnection approval process. Under the proposal, PJM Interconnection will move to a “first-ready, first-served” review process that groups projects in clusters for purposes of studying and allocating costs. Additionally, the Federal Energy Regulatory Commission (FERC) is allowing PJM to freeze new interconnection requests for three years and as a result the grid operator will stop accepting new requests until 2026.

PJM’s move is the latest by U.S. grid operators to reform their interconnection queue processes and follows similar reforms by the Southwest Power Pool and Midcontinent Independent System Operator. However, the three-year pause is unique to PJM and has been criticized by both clean energy advocates and commissioners at FERC, with Commissioner Allison Clements stating that she is reluctantly approving the reform.

The capacity in PJM’s queue has grown every year since 2017, reaching more than 250 gigawatts in May 2022, more than three times the capacity in 2017. This May 2022 figure represented more than 2,700 active projects, and solar, battery, and solar plus battery projects represent more than 95% of these. As this has happened the median duration between when a project applies for interconnection and when it is completed has stretched to roughly four years.

To clear out this massive backlog, PJM plans to implement a “transition phase” in early 2023 where it will prioritize half of the pending projects, including a “fast-lane” for projects that meet its criteria. PJM will also make changes to its standard interconnection processes, and FERC is requiring new language to confirm that only new service requests with no network upgrade cost allocation and no need for further studies are eligible for accelerated review.

PJM has blamed much of its backlog on speculative projects, and to crack down on these it will implement new requirements including “readiness deposits” and three decision points at which new requirements will be imposed and developers will have an opportunity to move forward or withdraw. At the third decision point, developers will be required to have site control for the project to
move forward.

Source: Order Accepting Tariff Revisions Subject to Condition (FERC)

News coverage: FERC approves PJM’s ‘first-ready, first-served’ interconnection reform plan, steps to clear backlog (UtilityDive)