The PJM Interconnection LLC's proposed compliance plan for a sweeping grid reform rule drew a wave of protests on June 20, with parties arguing that the proposal was an effort to skirt new federal requirements.
PJM, the mid-Atlantic region's 13-state grid operator, filed its proposal (ER24-2045) in May in response to the Federal Energy Regulatory Commission's orders 2023 and 2023-A aimed at easing a nationwide clean energy backlog.
Order 2023, issued in July 2023, provides for "independent entity variations" that allow regional grid operators to seek exemptions for tariff provisions that deviate from the final rule. In its May filing, PJM sought such variations on a range of matters, arguing that an "integrated package of reforms" approved by FERC in December 2022 was largely consistent with or superior to the requirements in Order 2023.
The grid operator is currently implementing a "first-ready, first-served" interconnection queue transition process to clear a huge backlog of proposed generation projects. PJM noted that it processed 160 service agreements for projects representing approximately 18,000 MW under the new approach in 2023.
"Now is not the time to force PJM to substantially revamp its reformed interconnection processes or to require a rigid adherence to the pro forma provisions adopted in the final rule that are inconsistent with or could undermine PJM's already approved reforms," PJM said.
Study deadlines, penalties
Among other issues, PJM argued that Order 2023's requirement for 150-day interconnection study cluster cycles is "infeasible and could cause significant disruptions and delays to the process due to the sheer volume of interconnection requests received."
But a coalition of clean energy trade groups said PJM's proposal would leave its current three-stage system impact study process, which totals 480 days, effectively in place. "PJM has not demonstrated why it is entitled to take more than triple the length of the interconnection study timeline set forth" in Order 2023, the American Clean Energy Association, Advanced Energy United, and the Solar Energy Industries Association said in a joint protest.
Meanwhile, the Sierra Club led a coalition of environmental groups to argue that the PJM proposal failed to reflect Order 2023's elimination of the "reasonable efforts" standard for transmission providers that miss study deadlines. In eliminating that standard, FERC established the first-ever penalty regime for transmission providers.
"Only when the delay exceeds 26% of the targeted completion time would PJM (or a transmission owner) pay any penalty," the groups wrote in a joint protest. "In other words, under PJM's proposed process, no penalty would be assessed for delays that are nearly as long as the entire study process that Order 2023 contemplates."
Site control, project extensions
Shell Energy North America (US) LP opposed PJM's request for a variation that would require interconnection customers to demonstrate "identical" site control throughout the interconnection study process. FERC's final rule requires developers to demonstrate 90% site control at the time an interconnection request is submitted, followed by 100% site control upon the execution of large generator interconnection agreement.
If PJM's request is granted, a developer would not be allowed "to modify its site control evidence in the event of an authorized change to its project size, or a regulatory requirement to revise a site's boundaries to preserve environmental or cultural resources, or other factors that could require some modification of a project site," Shell said in a protest.
EDF Renewables Inc., a developer active within PJM's footprint, also protested PJM's proposal to deviate from Order 2023 by limiting commercial operation date extensions to one year instead of three.
"The continued use of a three-year COD extension by other transmission providers, such as the Midcontinent ISO, even in the face of substantial queue backlogs, underscores that PJM's request for an independent entity variation is unwarranted," EDF Renewables said.
Longroad Energy Holdings LLC further protested PJM's proposal to deviate from Order 2023 by prohibiting the use of surety bonds as forms of readiness deposits. PJM had explained in its filing that "surety bonds can be more difficult to work with, particularly for readiness deposits, because they have to be converted to cash when needed."
However, Longroad Energy contended that "developers have good reasons to prefer surety bonds."
"A surety bond tends to be easier to procure and significantly less expensive than a comparable letter of credit," the developer said in its protest. "Consequently, generation developers sometimes prefer surety bonds, and view letters of credit as resources that should be used with great care."
Surplus interconnection capacity, storage assumptions
EDP Renewables North America LLC, another active developer in PJM, was one of several parties that protested PJM's requested variation for its surplus interconnection capacity procedures.
Order 2023 allows developers to seek earlier access to surplus interconnection capacity, which is commonly requested for hybrid facilities, such as solar-plus-storage resources. The FERC final rule allows these types of requests once the original interconnection customer has executed a large generator interconnection agreement or requests the filing of an unexecuted agreement.
EDP Renewables noted that it filed a request with PJM for surplus interconnection service in August 2023, but PJM denied it. The developer said one basis for the PJM denial "was that the generating resources could operate simultaneously within the allotted interconnection capacity."
"PJM is implementing surplus interconnection service in a manner that makes it virtually impossible for customers to actually take advantage of it," EDP Renewables said.
The New Jersey Board of Public Utilities protested PJM's requested variation to continue "conservatively" assuming that battery storage resources "will withdraw power at their maximum capacity during peak load conditions."
"New Jersey has a statutory mandate to deploy 2,000 MW of electric storage resources by 2030, most of which will likely be processed through PJM's interconnection queue," the utility commission said. "Consequently, any unnecessary increase in the cost of interconnecting electric storage resources is an unnecessary cost that may ultimately be borne by New Jersey ratepayers."
The WATT Coalition, a trade group that advocates for advanced transmission technologies, was one of several parties to argue that PJM's proposal falls short of Order 2023's requirement to more fully consider alternative transmission technologies during the interconnection study process. PJM had explained in its filing that a forthcoming technical reference guide "will catalog those technologies and describe the conditions under which certain technologies may be considered as a reinforcement solution."
But the WATT Coalition argued that PJM did not offer transparency into how these technologies "were evaluated in interconnection studies, as required by Order 2023, or propose to implement transparent reporting."
