Released February 14, 2025 | SUGAR LAND
en
Written by Jill Sampson for Industrial Info Resources (Sugar Land, Texas)--Regional transmission operators (RTOs) in the U.S. are adapting generation interconnection processes to keep up with forecasted load growth, retirement of thermal generators, balancing operational characteristics of generation fleets, the constraints of siting, permitting, approvals, and equipment supply-chain challenges.
The application window for RRI projects opens Feb. 28 and closes March 14.
PJM is facing a typical generation supply problem because data-center load is increasing and thermal generating plants are retiring faster than new generation is being approved and built in its territories. The PJM Interconnection covers all of Delaware, Maryland, New Jersey, Pennsylvania, Virginia and West Virginia, as well as significant portions of Kentucky and Ohio, and small portions of Illinois, Indiana, Michigan, North Carolina and Tennessee.
While not alone, PJM is experiencing a drop in reserve capacity that is an indication this is an urgent matter. In response, PJM proposed changes to tariff provisions, interconnection services, and capacity markets. PJM's argument is that additional interconnection processes operating in parallel to the existing processes would help the RTO align deactivation with energizing replacement generation.
On Tuesday, the Federal Energy Regulatory Commission (FERC) approved two PJM proposals designed to help boost the supply of electricity to the region. PJM's Reliability Resource Initiative (RRI) is designed to fast track key projects in the PJM interconnection queue. The RRI represents a narrow, limited duration solution to interconnect 50 facilities that are "shovel-ready" and not currently in the near-term queue. Regulators would qualify the projects using a weighted scoring method that adds value for specific locations and reliability, while allowing all types of generation resources to be considered.
PJM has indicated it will rely on the expertise of the states in the region to assist in the determination of an RRI project's viability in terms of state permitting and site readiness.
The PJM board of managers came out in favor of the RRI as an imbalance in supply and demand could happen as early as 2026. The RTO's data show PJM will need anywhere from 62% to 100% of the resources currently in its queue to achieve commercial operation and maintain resource adequacy without additional intervention. Although stakeholders are particularly divided on the RRI proposal, PJM's primary responsibility is to maintain grid preparedness and reliability.
FERC also approved PJM's proposed change to its Surplus Interconnection Service (SIS) rules, which could free up 26 gigawatts of accredited capacity for the 2026-27 delivery year. The SIS process is separate from the RRI or regular interconnection process and would be faster and cost less than other options to speed up adding large batteries to the grid in key locations.
PJM would also like to see a change to its capacity markets, to require intermittent resources, storage resources and hybrid resources to take part in capacity auctions, beginning in the 2026-27 delivery year. Stakeholders have concerns in regard to how the change reduces the grid operator's market powers and might eliminate some competitive pricing structures currently in place.
FERC has been ruling on the methods and means that RTOs everywhere are to interconnect advanced manufacturing facilities, data centers and artificial intelligence (AI)-related companies. Conversations are continuing with regulators, policymakers and other stakeholders to safeguard smaller users and residential customers by allocating electricity costs fairly. Other regulators are also getting creative. PG&E Corporation (NYSE:PCG) (Oakland, California) proposed Rule 30 in January that would require future large customers to pre-pay for electrical facilities so small customers do not bear these costs. Payments may be refunded when the new load comes online and is shown to provide revenue sufficient to support the refund. PGE is also prototyping a fast, flexible interconnection process for advanced manufacturing facilities, data centers, and AI-related companies.
FERC also convened a technical conference on November 1, 2024, focused on the growing issues associated with the co-location of large loads, primarily data centers and generating facilities. Load forecasting, behind-the-meter interconnection concerns, regulatory authority, and impact on reliability were all the table for discussion.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
The application window for RRI projects opens Feb. 28 and closes March 14.
PJM is facing a typical generation supply problem because data-center load is increasing and thermal generating plants are retiring faster than new generation is being approved and built in its territories. The PJM Interconnection covers all of Delaware, Maryland, New Jersey, Pennsylvania, Virginia and West Virginia, as well as significant portions of Kentucky and Ohio, and small portions of Illinois, Indiana, Michigan, North Carolina and Tennessee.
While not alone, PJM is experiencing a drop in reserve capacity that is an indication this is an urgent matter. In response, PJM proposed changes to tariff provisions, interconnection services, and capacity markets. PJM's argument is that additional interconnection processes operating in parallel to the existing processes would help the RTO align deactivation with energizing replacement generation.
On Tuesday, the Federal Energy Regulatory Commission (FERC) approved two PJM proposals designed to help boost the supply of electricity to the region. PJM's Reliability Resource Initiative (RRI) is designed to fast track key projects in the PJM interconnection queue. The RRI represents a narrow, limited duration solution to interconnect 50 facilities that are "shovel-ready" and not currently in the near-term queue. Regulators would qualify the projects using a weighted scoring method that adds value for specific locations and reliability, while allowing all types of generation resources to be considered.
PJM has indicated it will rely on the expertise of the states in the region to assist in the determination of an RRI project's viability in terms of state permitting and site readiness.
The PJM board of managers came out in favor of the RRI as an imbalance in supply and demand could happen as early as 2026. The RTO's data show PJM will need anywhere from 62% to 100% of the resources currently in its queue to achieve commercial operation and maintain resource adequacy without additional intervention. Although stakeholders are particularly divided on the RRI proposal, PJM's primary responsibility is to maintain grid preparedness and reliability.
FERC also approved PJM's proposed change to its Surplus Interconnection Service (SIS) rules, which could free up 26 gigawatts of accredited capacity for the 2026-27 delivery year. The SIS process is separate from the RRI or regular interconnection process and would be faster and cost less than other options to speed up adding large batteries to the grid in key locations.
PJM would also like to see a change to its capacity markets, to require intermittent resources, storage resources and hybrid resources to take part in capacity auctions, beginning in the 2026-27 delivery year. Stakeholders have concerns in regard to how the change reduces the grid operator's market powers and might eliminate some competitive pricing structures currently in place.
FERC has been ruling on the methods and means that RTOs everywhere are to interconnect advanced manufacturing facilities, data centers and artificial intelligence (AI)-related companies. Conversations are continuing with regulators, policymakers and other stakeholders to safeguard smaller users and residential customers by allocating electricity costs fairly. Other regulators are also getting creative. PG&E Corporation (NYSE:PCG) (Oakland, California) proposed Rule 30 in January that would require future large customers to pre-pay for electrical facilities so small customers do not bear these costs. Payments may be refunded when the new load comes online and is shown to provide revenue sufficient to support the refund. PGE is also prototyping a fast, flexible interconnection process for advanced manufacturing facilities, data centers, and AI-related companies.
FERC also convened a technical conference on November 1, 2024, focused on the growing issues associated with the co-location of large loads, primarily data centers and generating facilities. Load forecasting, behind-the-meter interconnection concerns, regulatory authority, and impact on reliability were all the table for discussion.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
