The Federal Energy Regulatory Commission has accepted the PJM Interconnection's proposal to create a process separate from the traditional interconnection process for transferring Capacity Interconnection Rights from a retiring facility to an equivalent replacement resource at the same site.
The plan is among several that PJM and stakeholders have initiated to get generation connected to the grid as efficiently as possible to help mitigate the supply/demand imbalance and maintain reliability.
Capacity Interconnection Rights (CIRs) permit a generation resource to input power into the transmission system at the facility’s Point of Interconnection to the grid. CIRs enable these resources to participate in capacity auctions.
PJM’s existing rules allow a deactivating resource to retain its CIRs for one year. The new rules, effective Jan. 30, enable a replacement resource to enter the new expedited Replacement Generation Interconnection Process if it will connect at the same substation, will operate at the same voltage, and does not exceed the maximum generation output of the deactivating facility.
“We find that PJM’s current proposal to establish a separate, more streamlined interconnection process for Replacement Generation Resources promotes the efficient use of existing infrastructure and yields numerous other benefits, including: (1) efficiencies through using existing interconnection service at retiring facilities; (2) reduced interconnection timelines for replacement generation through an expedited study process; (3) cost savings for customers by reducing study and construction costs; and (4) reduced interconnection-related uncertainty in generation resource planning,” FERC said in its Jan. 29 order.
The proposal is the result of work undertaken at the Interconnection Process Subcommittee and Planning Committee in 2023–2024. PJM’s first filing was rejected without prejudice by FERC, in part because it allowed a one-time option for a replacement developer to extend the project’s commercial operation date. The lack of a maximum time limit undermined the purpose of the generator replacement process, FERC said.
PJM’s amended proposal addressed FERC’s concerns in part by providing replacement generation developers with a one-time opportunity to submit any changes to their proposed resource within 15 business days after a Material Adverse Impact determination.
The new CIR transfer process is one of several ways PJM and its stakeholders have adopted or are exploring to maintain reliability as new large load threatens to outstrip the supply of dispatchable resources.
Others include:
• Reliability Resource Initiative: This one-time initiative was designed to process more shovel-ready projects that could most effectively contribute to reliability on an expedited timeline in the queue. The effort resulted in the selection of 51 projects. A total of 41 projects representing approximately 8,000 MW of generation are moving to the next phase in the study process, while 10 have withdrawn.
• Surplus Interconnection Service: This change to PJM’s interconnection rules aims to streamline the use of any unused portion of interconnection service for a facility that cannot or does not operate continuously, every hour of every day, year-round (e.g., adding battery storage to a renewable site).
• Google/Tapestry Collaboration: PJM has made significant investment in interconnection tools and automation for both internal and external use, and is collaborating with Google/Tapestry to deploy AI-enhanced tools to further streamline PJM’s planning process and reduce administrative overhead.
• Expedited Interconnection Track: As set out in the Board’s decisional letter on Critical Issue Fast Path – Large Load Additions, this will be a new track for state-sponsored generation with a contractual commitment. This process would be standalone outside of the PJM interconnection Cycle process and operate in parallel. Expedited timing allows shovel-ready resources of at least 250 MW of accredited unforced capacity value to execute Generation Interconnection Agreements sooner and allows an earlier path toward construction and network upgrade certainty. PJM would accept and study no more than 10 completed and valid applications for Expedited Interconnection Track treatment per calendar year.
