Spark or Static? FERC’s New Generator Transmission Interconnection Rule

Originally published for customers August 16, 2023

FERC issued a Final Rule requiring those interstate transmission providers to adopt revised generator interconnection procedures and agreements to reduce queue backlogs. Some provisions may be more effective than others.

What’s the issue?

On July 27, 2023, FERC issued Order 2023, a Final Rule which requires transmission providers such as RTOs, ISOs, and other traditional utilities that provide transmission services in interstate commerce to adopt revised generator interconnection procedures and agreements aimed at reducing interconnection queue backlogs.

The 1500-page Order seeks to accomplish this by modifying the procedures governing generation interconnection requests filed with transmission providers. The Final Rule modifies these procedures to:

1. require transmission providers to study generation interconnection requests in “clusters” instead of one at a time;
2. speed up interconnection queue processing by imposing deadlines and financial penalties on transmission providers that fail to complete interconnection studies on time; and
3. require transmission providers to incorporate technological advancements in their procedures.

Why does it matter?

The number of increasingly diverse new resources seeking to interconnect to the transmission system has grown significantly, creating large interconnection queue backlogs and uncertainty regarding the cost and timing of interconnecting to the transmission system. These backlogs also create reliability issues as needed new generating facilities are unable to come online in an efficient and timely manner.

What’s our view?

Order 2023 may have a transformational effect on generator interconnection procedures. However, the degree to which these changes will actually shorten backlog queues, create regulatory certainty, and result in increased grid reliability remains to be seen.