The Federal Energy Regulatory Commission unanimously passed a sweeping rule at its July 27 open meeting meant to eliminate U.S. transmission system bottlenecks for new power generation and storage. But stakeholders worry that more needs to be done to add needed and viable clean energy projects to the grid.
Details of the rule were not released and date of publication in the Federal Register remains unclear, but it will take effect 60 days after being published and require compliance plans from regional grid operators 90 days after that.
FERC Chairman Willie Phillips called the final rule "historic" in a post-meeting press briefing, noting 2,000 GW of projects in the u.S. waiting to be connected to the grid—double the amount of generation now in service in the country. The backlog has increased project connection time to five years, up from three years in 2015 and two years in 2008, he said.
The 2,000 GW include more than 10,000 clean energy projects compared to the past when only a handful of new coal and gas-fired plants were planned each year—leaving the existing U.S. transmission connection process unable to cope with vastly added volume.
In a recent study of connections between 2018 and 2022, Lawrence Berkeley National Lab found that developers unprepared for added costs of transmission upgrades and other connection complexities dropped out of queues, which required new analysis of remaining projects and generated an average four-year wait for approval.
Grid operators such as the 13-state PJM Interconnection stretching from the Mid-Atlantic to midwest have launched plans for major process changes to fix project backlog, but the realignment now also includes a four-year pause in handling new project approval requests.
“Projects are like a train without a track,” Phillips said.
Getting Back on Track
Under current rules, projects generally are evaluated on a first-come, first-serve basis. The new rule requires transmission grid operators to consider "clusters" of similar projects and give priority to those closest to construction. “This will help minimize delays and improve cost allocation by analyzing the transmission system impacts of multiple projects at once,” FERC said.
Currently project developers also must pay for transmission upgrades needed for connection to the grid. The final rule requires them to also submit financial deposits and evidence of land or building rights to show "commercial readiness" for grid connection review. But the rule will not require a contract with an electric utility or other power provider to be considered, nor other previously proposed proof of "non-financial" readiness.
The rule also sets firm deadlines for transmission providers to complete interconnection studies and sets penalties for missing deadlines.
Transmission providers also must allow more than one generating facility on a common site to share a single interconnection request, such as a wind or solar power facility and battery storage project. Interconnection customers can also add a generating facility to an existing request without that being a material change.
The rule also requires the providers to evaluate alternative grid enhancing technologies—including static synchronous compensators, static VAR compensators, advanced power flow control devices, transmission switching, synchronous condensers, voltage source converters, advanced conductors and tower lifting, said FERC Commissioner Allison Clements.
Planning Is Next Hurdle
“Moving these renewable generation and storage facilities from the queue to the real world is a critical step toward creating a clean, reliable and efficient energy grid,” says Greg Wannier, senior attorney at the Sierra Club.
While the new rule is considered a “landmark,” it is just the beginning of actions to move energy transition forward, say advocates. “We have a long way to go before we clear the two terawatts of generation and storage that are trapped in the interconnection queue,” said Melissa Alfano, director of energy markets at the Solar Energy Industries Association.
The American Council on Renewable Energy said it wants to see FERC finalize a proposed rule that requires comprehensive long-term transmission planning that would “reform the dysfunctional funding model for new transmission lines.”
Phillips said transmission planning has always been a top priority, with FERC “trying to get this done as fast as we can,” saying that a final rule will be issued "in the months ahead."
The agency issued the proposed rule in April 2022 that would require long-term regional transmission planning based on growth of renewable energy. It also would change cost allocation rules for upgrades and expansions, which is contentious because of differing views among utilities, states. developers and operators.
Still, if approved, advocates say it would further unlock renewable projects and resolve conflicts over who pays for added transmission.
Sen. Martin Heinrich (D-NM) says grid capacity needs to be expanded by 60% by 2030 to achieve national clean energy goals, and tripled by 2050.
But projects totaling 50 GW of new generating capacity in the 15-state Midcontinent ISO grid (MISO) have requested three-year delays despite having signed interconnection agreements, according to S&P Global on July 27. It cites the operator's CEO John Bear, who told an industry event last month that about 60% of those projects are experiencing "some type of supply chain issue."