The Federal Energy Regulatory Commission (FERC) has moved forward with a proposal from PJM Interconnection, allowing for a quicker interconnection review of ready-to-go generation projects. This decision comes amidst some dissent from renewable energy developers who expressed their opposition.
Additionally, FERC approved PJM’s efforts to expand grid access through underused interconnection capacity by updating its Surplus Interconnection Service (SIS) rules. These changes aim to strengthen power supply in the region as PJM anticipates potential capacity shortages starting in 2026.
The initiative, a part of PJM’s broad strategy to enhance resource reliability, allows for a special interconnection review for up to 50 projects. This “Reliability Resource Initiative” addresses concerns over resource adequacy due to factors like rising energy demand and the early retirement of power plants. According to estimates, this fast-tracking could make about 10 gigawatts of energy available 18 months sooner than if the projects underwent the usual approval process.
FERC commissioners Willie Phillips and David Rosner emphasized the necessity of taking action to avert significant issues for consumers in the PJM area, even acknowledging some uncertainty about the ability of the initiative to meet near-term capacity needs.
However, dissent came from Commissioner Judy Chang, who argued that this expedited process might not resolve the potential shortages before 2030. She raised concerns that the focus on large-generation projects could hinder progress, as these are often complex and time-consuming to develop.
Under this initiative, PJM has set criteria for projects based on reliability, viability, and availability, initiating the interconnection review process known as Transition Cycle #2. FERC asserted that these criteria are fair and inclusive of all technologies.
Moreover, FERC’s ruling also rejected claims from some developers that PJM’s plan contravenes regulations concerning retroactive rate setting. They noted that setting firm expectations regarding Transition Cycle #2 is challenging until more details are clarified.
PJM’s decision to limit participation to 50 projects was deemed a balanced approach by FERC, aimed at preventing overwhelming the review process while still addressing regional energy needs. Support for the initiative came from various stakeholders, including state utility regulators, market monitors, and electric utility companies, although renewable developers like Invenergy and groups such as the Sierra Club opposed it.
In addition to the interconnection reviews, FERC also approved changes to the SIS rules, allowing unused capacity from existing connections to be utilized more effectively. This expansion could potentially unlock over 26 gigawatts of new capacity for the upcoming delivery years, helping to address the increasing electricity demands.