On Feb. 11, 2025, the Federal Energy Regulatory Commission (FERC) issued an order accepting PJM Interconnection’s proposed revisions to its Open Access Transmission Tariff (Tariff) regarding surplus interconnection service (SIS). These revisions, part of a bundle of ongoing reliability and resource adequacy-focused reforms in PJM, aim to increase the efficiency of the interconnection queue and bring resources online more quickly. Effective March 7, 2025, the modifications will provide greater SIS access to interconnection customers, including those interested in co-locating storage at an existing point of interconnection, and will permit such access earlier in the development cycle.
Background
In Order Nos. 845 and 845-A, FERC required transmission providers to implement a process for interconnection customers to use SIS, which it defined as any unneeded portion of interconnection service established in a Large Generator Interconnection Agreement (LGIA) at existing points of interconnection. The SIS process is separate from the full interconnection process and allows projects to come online more quickly than they otherwise would, so long as no new network upgrades are required. Later, in Order No. 2023, FERC required transmission providers to allow interconnection customers to access SIS once the original interconnection customer executes an LGIA (or requests that such an agreement be filed with FERC unexecuted).
In compliance with Order Nos. 845 and 845-A, PJM implemented an SIS process, but prohibited its use when it: (1) required new network upgrades, (2) had additional impacts affecting the determination of what network upgrades would be necessary for other interconnection customers in the queue, and (3) had a material impact on short circuit capability limits, steady-state thermal and voltage limits, or dynamic system stability and response. In addition, the service was not available to storage resources and could only be utilized by projects that were fully constructed and operating. PJM’s Order No. 2023 compliance filing remains pending.
PJM Surplus Interconnection Revisions
In its Dec. 20, 2024, filing proposing the SIS revisions, PJM explained that generator retirements, load growth, the pace of new entry, and operating characteristics of the intermittent and limited duration resources that make up a large part of PJM’s interconnection queue pose increasing reliability risks to the region in the near-term. By removing existing SIS limitations and allowing SIS requests to be submitted earlier in the project development cycle, PJM stated that its proposed revisions would increase the capacity available to address such reliability and resource adequacy concerns. In addition, PJM noted that the revisions would comply with Order No. 2023 SIS requirements, bring its SIS Tariff provisions in alignment with other regional transmission organizations’ processes and address issues raised in a pending complaint against PJM filed in Docket No. EL24-125.
The SIS revisions:
- Allow construction of additional interconnection facilities where needed to accommodate SIS (while still prohibiting it where network upgrades are required)
- Remove the prohibition on using SIS if it would affect the determination of network upgrades for projects already in the interconnection process or result in material impacts on short circuit capability limits, steady-state thermal and voltage limits, or dynamic system stability and response
- Expand the availability of SIS to interconnection customers with new projects that have not been constructed but have an executed interconnection agreement (or have requested the filing of an unexecuted agreement)
- Allow electric storage resources to use SIS
In addition, the revised provisions permit SIS requests to be processed through the SIS expedited process during the agreement implementation phase of the main interconnection queue, further expediting use of the service.
FERC accepted PJM’s proposal, finding that the revisions are just and reasonable and not unduly discriminatory or preferential and meet FERC’s independent entity variation standard because, consistent with the purpose of Order Nos. 845 and 2023, the Tariff revisions will increase the utilization of existing interconnection facilities and network upgrades, which could reduce costs for interconnection customers and increase overall efficiency of the interconnection queue.
Specifically, FERC found that allowing the utilization of SIS when additional interconnection facilities are required, unlike new network upgrades, does not impact other interconnection queue customers because the cost responsibility falls only on the relevant interconnection customer. FERC also accepted PJM’s removal of the prohibition on SIS use in the circumstances described above, since PJM maintained the “critical” Order No. 845-A prohibition against granting SIS that would require new network upgrades.
FERC found PJM’s proposal to expand the availability of SIS to interconnection customers that have an executed (or request PJM to file an unexecuted) interconnection agreement to be just and reasonable, noting that the revisions are consistent with the requirements of Order No. 2023.
FERC also approved PJM’s proposed Tariff revision to allow electric storage resources to use SIS, noting that doing so will provide such resources the same option to use SIS as other generating facilities, and will facilitate timely and efficient interconnection of new generating facilities.
Finally, FERC rejected certain intervenors’ requests that PJM be required to provide clarifications, adopt additional Tariff revisions or undertake additional processes as being outside the scope of the proceeding.
PJM’s SIS revisions become effective on March 7, 2025, and PJM has committed to work with its stakeholders to implement the necessary changes to Manual 14H to conform with the SIS Tariff revisions.
For more information, see the full text of the Order Accepting Tariff Revisions.
