FERC Order No. 2023 Shakes up ‘the Status Quo’ in Energy Interconnection

“This is a watershed moment for our nation’s transmission grid.”– Willie Phillips, FERC Chairman, July 27, 2023.

In July, the Federal Energy Regulatory Commission (FERC) issued its final rule for Order No. 2023, aiming to speed up interconnection development timelines and reduce queue backlogs for transmission providers, renewables developers, and grid operators.

“This new rule will enable America’s vast power generation resources to connect to the grid in a reliable, efficient, transparent, and timely manner, and in doing so, help provide more reliable, resilient, and affordable electricity for all consumers,” said Willie Phillips, FERC Chairman.

Well, now comes the complicated part (…and it’s complicated). Although the compliance filing date for transmission providers has been extended to April 3, 2024, providers throughout the country must make significant changes to adapt various existing interconnection processes to incorporate key reform areas, including:

• Institution of a first-ready-first-served cluster study process.
• Increased financial commitments for interconnection customers.
• Imposition of firm deadlines and penalties if transmission providers fail to complete their interconnection studies on time; incorporation of technological advancements into the interconnection process, including consideration of advanced transmission technologies in the interconnection study process.
• Update of modeling and performance requirements for inverter-based resources to ensure continued system reliability.

Providers must update tariffs; developers must understand new processes and how they might affect existing projects and queue positions. Adding to the complexity is the fact that today’s projects are smaller than traditional thermal units. This includes new locations, the potential for intermittency, and emerging technological innovations. All these factors add up to make system impact studies more difficult to perform. The diversity of project development locations emphasizes the need for additional transmission (new and upgrades) to facilitate the efficient integration and development of today’s queued project pipelines, all while the debate over who gets to pay for these transmission improvements remains a point of contention in the future, depending on ‘who’ benefits.

While a ‘new normal’ in the interconnection process is a long way away, NEI stands ready to be your trusted partner during this transition. Our transmission experts can help you navigate the evolving landscape. Whether its supplementing your transmission planning staff to evaluate options or meet compliance deadlines, identifying new project opportunities, or even advising you on existing projects under evaluation, NEI is here to support you. With new financial commitments heightening project development risks, it’s becoming more important than ever for developers and transmission planners to understand individual projects and how they will interact with existing transmission systems or clusters of projects around them.

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