FERC on Feb. 11 approved two PJM proposals aimed at allowing some generation projects to speed through its backlogged interconnection queue.
The Reliability Resource Initiative (RRI) is a one-time measure to add up to 50 new projects to a cluster of projects to be studied beginning in April (ER25-712), while an expansion of surplus interconnection service (SIS) makes more projects eligible to use underutilized injection capability (ER25-778).
FERC noted that the proposals are part of a wider effort at PJM to address a capacity shortfall the RTO has identified toward the end of the decade by allowing new resources that either would contribute to grid reliability or require minimal transmission upgrades to advance through the interconnection process in an expedited manner.
In its “4R’s Report,” PJM said it could be short 10 GW of capacity in the 2030/31 delivery year because of rising load growth, generation retirements and slow new entry; in a June 2024 study, that resource adequacy deficiency was moved up by one year. (See “PJM White Paper Expounds Reliability Concerns,” PJM Board Initiates Fast-track Process to Address Reliability.)
For the RRI, that takes the form of a special application window for Transition Cycle 2 (TC2), created in 2023 as part of PJM’s transition to a first-ready, first-served clustered generator interconnection process. (See FERC Approves PJM Plan to Speed Interconnection Queue.)
PJM will allow up to 50 projects to be added to TC2, which otherwise is open only to “legacy” projects that had been sorted into queue windows AG2 and AH1, the latter of which closed in September 2021. If more than 50 applications are received, PJM will use weighted scoring to determine which will proceed:
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- 35 points based on the project’s unforced capacity (UCAP);
- 20 points for resources with high effective load-carrying capability (ELCC) ratings;
- 10 points for projects sited in the Dominion or BGE zones;
- 10 points for being able to achieve commercial operation between 2028 and 2031;
- 10 points for evidence of permits, siting and equipment procurement supporting a project’s in-service date;
- 10 points to projects that are uprates of existing generation or planned projects; and
- 5 points for projects that take advantage of existing transmission headroom.
“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,” PJM General Counsel Chris O’Hara said in a statement. “We now hope to see suppliers take advantage of this unique opportunity.”
In a Feb. 12 message to members, PJM said the application window for RRI projects will be open between Feb. 28 and March 14.
‘Close Call’
The RRI was approved 3-1, with Commissioner Judy Chang in dissent and Commissioner Lindsay See not participating.
Chang said that while she agreed with PJM’s assessment that it has a looming resource adequacy problem, “its proposed solution primarily prioritizes the size of the new interconnecting resources over speed and thus is poorly designed to address those very real challenges.”
She said the proposal should have been rejected without prejudice, allowing PJM to file a similar proposal but with more focus on the viability of commercial in-service dates, which she said should have received the greatest weight of all criteria. She also said that granting only 5 points for transmission headroom availability undersells the value that requiring minimal network upgrades can have on being able to quickly progress.
“By expediting projects that are unlikely to directly address PJM’s reliability risks in the 2026-2030 time frame, PJM’s filing also presents a risk of the worst of both worlds: It compromises the commission’s open-access principles with no guarantee it will resolve PJM’s reliability issue,” Chang wrote.
Commissioners David Rosner and Willie Phillips filed a joint concurrence in which they expressed some reluctance but found that the “one-time, extraordinary measure … is only needed because of the equally extraordinary circumstances PJM finds itself in today.”
The two commissioners said the RRI would not upset the settled expectations of existing projects already in the queue but also criticized PJM’s weighting that favors large projects possibly coming at the cost of rapid construction.
This made their approval “a close call,” they wrote. “We would have fewer reservations about PJM’s RRI proposal had the commercial operation date viability criteria been stronger. We are concerned that PJM’s proposal may not enable sufficient ‘shovel-ready’ resources to interconnect and enter commercial operation in time to prevent the resource adequacy crisis that motivated PJM to develop this proposal in the first place.
“In particular, the proposal does not outright require RRI resources to achieve commercial operation by a date certain (e.g., in service prior to 2030) and assigns only 35 out of 100 points to commercial operation viability criteria.”
Response to Protests
Comments on the RRI remained as divided as stakeholders were when PJM broached it with its membership last year. Many renewable energy developers and clean energy associations were opposed, arguing it would allow queue-jumping, mainly to the benefit of large thermal generators, and possibly increase the network upgrade costs for projects that have been in the queue for years.
Other generation developers argued it would allow uprates and projects that would be built quickly to enter the queue, a perspective shared by consumer advocates and the Organization of PJM States Inc. (OPSI). (See PJM Stakeholders Wary of Expedited Interconnection Proposal.)
Invenergy argued that PJM has a track record of discriminating against certain resource classes, which would be continued by the proposal carrying an effective categorical exclusion of wind and solar by prohibiting projects smaller than 10 MW and through the UCAP and ELCC weighting. The Natural Resources Defense Council argued that because UCAP already takes into account resources’ ELCC ratings, breaking the latter out into a second component that disadvantages renewables and storage.
Constellation said that splitting ELCC and UCAP into two criteria allows for more diversity in the scoring, making it easier for small, high-impact resources like storage to be included.
Rather than using weighted scores, the Independent Market Monitor said PJM should prohibit projects that don’t meet three thresholds: whether a project would be in the correct location to address a reliability issue, possesses the operating characteristics needed to meet that need and would be capable of entering service in time. Rather than using a static number of projects, the Monitor also advocated for a capacity limit for how many projects can be accepted.
“Protesters assert that the RRI proposal allows PJM to put a ‘thumb on the scale’ in favor of certain resources in a manner that intrudes upon states’ jurisdiction over the resource mix within their boundaries. We disagree,” FERC said. “The proposal neither mandates nor prohibits the development of any particular generating facility, and it neither authorizes nor requires the adoption of a specific mix of generation resources.”
In a statement, Jon Gordon, director of Advanced Energy United, said he agrees bold action is needed to address a possible capacity shortfall, but the RRI would not move that ball forward.
“Unfortunately, the Reliability Resource Initiative is a distraction from the task at hand: restoring confidence in PJM’s interconnection process by fully implementing reforms already underway and prioritizing further improvements — such as the surplus interconnection service reforms also approved by FERC,” Gordon said. “RRI is a misguided proposal that will disrupt the existing queue process with no guarantee of meeting PJM’s identified reliability shortfall. United continues to implore PJM to employ an ‘everything all at once’ strategy to bring clean energy resources stuck in the interconnection queue online as quickly as possible and ensure PJM resource reliability going forward.”
Sierra Club staff attorney Megan Wachspress said PJM is resisting reforms that would allow more renewable projects to be built in its footprint.
“It is deeply disappointing that, despite the problems identified by Commissioner Chang and acknowledged by Commissioners Phillips and Rosner, FERC would greenlight PJM’s misguided effort to improve its interconnection process, knowing that adding more toxic gas plants will cause long-term environmental and public health issues across the Mid-Atlantic region,” Wachspress said. “Additionally, there’s no reason to believe this proposal will even address PJM’s short-term capacity problem, since it does not require any of the chosen resources to be online by 2030 or even 2035.”
Changes to Surplus Interconnection Service Widen Eligibility
FERC unanimously approved PJM’s SIS proposal, though again without Commissioner See’s participation.
The changes eliminate a categorical restriction on battery storage taking advantage of SIS; allow the service to be used when the original resource is planned and still in development; and allow projects that consume transmission headroom but do not require network upgrades. It also allows projects that require upgrades to interconnection infrastructure to proceed, a change the commission said is warranted given that developers pay the entirety of those costs and therefore would not impact other interconnection customers.
“PJM’s proposal will facilitate the use of existing surplus interconnection capacity by removing certain limitations in the PJM tariff and by making surplus interconnection capacity available sooner in the interconnection process,” FERC said.
Aftab Khan, PJM executive vice president of operations, planning and security, said FERC’s approval of the proposal will allow it to better take advantage of existing interconnections.
“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,” Khan said.
The proposal received broad support from developers, who argue the RTO has taken a restrictive approach to a process that is meant to allow projects sited at the same point of interconnection as an existing resource.
In a joint filing, the American Clean Power Association, Advanced Energy United, MAREC Action and the Solar Energy Industries Association said the proposal would unlock dozens of gigawatts of capacity that could be deployed quickly to address resource adequacy concerns, while also potentially reducing strain on the interconnection study process.
“Under the current process, most surplus interconnection service requests are deemed invalid, necessitating a new service request and placing the developer at the end of the interconnection queue,” the groups said. “PJM’s proposal eliminates this restriction.”