Commissioner Clements Concurrence Regarding PJM Interconnection, L.L.C.

Docket Nos. ER22-2110-000, ER22-2110-001

I reluctantly concur.  PJM’s interconnection process is failing customers, as thousands of megawatts of projects holding the potential to deliver lower cost energy to customers while enhancing system reliability wait years to connect to the system and face enormously costly delays.  As the American Clean Power Association observes, “[d]ue to its antiquated serial study process, PJM’s interconnection queue is backlogged and the situation is only getting worse. . . .  As of January 2022, only one percent of all facilities studies were completed on time,” with hundreds of studies delayed well past their promised timelines.[1]  The Organization of PJM States notes that, astonishingly, “only 13 facilities studies were completed in April and May of 2022 against a backlog of 1,585.”[2]

PJM has done just enough to demonstrate that its proposal is just and reasonable and not unduly discriminatory.  The record demonstrates that PJM’s proposed reforms, while imperfect, have the potential to substantially accelerate its broken status quo interconnection process.  And although PJM’s proposal can be accepted on the record before us, the Commission’s Notice of Proposed Rulemaking on interconnection reforms[3] remains pending and its broader record may well provide a basis for further changes to PJM’s interconnection process.  

The unfortunate fact is that PJM’s interconnection queue has spiraled out of control.  The region’s challenges stem both from flaws in the interconnection process that PJM now revises, and from the failure of PJM’s transmission planning process to plan for major infrastructure improvements needed to keep pace with a changing resource mix.  PJM’s proposed four-year pause on new interconnection requests is frustratingly slow and may implicate countless new projects attempting to connect to the system, but I am persuaded that it is a reasonable step to clear the region’s enormous backlog given how long many projects will inevitably be delayed.  Further, any order rejecting PJM’s approach would only subject interconnecting projects and customers to additional delay as the region continued to implement its broken and outdated serial interconnection process.[4] 

Additional steps including better transmission planning will be essential complements to PJM’s proposal.  Planning major network upgrades via the interconnection process does not work.[5]  It inevitably results in queue withdrawals, restudies, and delays.  PJM and its customers are reaping the results of this failed approach, which will hopefully soon be corrected.  It is a credit to Chairman Glick’s leadership that he immediately prioritized transmission and interconnection reform at the beginning of his term, and the Commission has issued multiple Notices of Proposed Rulemaking that hold potential to help alleviate the gridlock.  Yet those rulemakings will take time to play out.  In the meantime, PJM’s package of proposed reforms helps to chart a new course for the region. 

Nevertheless, certain aspects of PJM’s proposal are concerning.  First, and perhaps most disquieting, is PJM’s choice to require 100% site control for interconnection facilities at Decision Point III.  Today’s order accepts this proposal, which is consistent with other public utilities’ generator interconnection procedures.[6]  But it is hard to ignore commenters’ significant concerns that PJM’s proposal “may inadvertently remove eminently viable projects from its interconnection queue.”[7]  They argue that the site control requirement may prove to be too onerous in practice because gen-tie line sites may involve numerous small land parcels for which minor issues could come up, and because last minute changes in line routes may occur.[8]  PJM’s untested approach appears to be unique among RTOs.

The 100% site control requirement is particularly concerning given its potential to facilitate potential anti-competitive conduct on the part of the interconnecting transmission owner.  Because the path or location for interconnection facilities can potentially be changed late in the process by the transmission owner during the facilities study,[9] I am concerned that a generation-owning transmission owner could utilize the facilities study process to direct a late-stage route change, which when coupled with PJM’s 100% site control requirement, could lead an otherwise viable project to withdraw from the queue. 

It is therefore critical as PJM’s proposal is implemented to ensure that transmission owners give comparable treatment to all projects, whether developed by an affiliated entity or a competitor.  Because of this concern I encourage stakeholders to bring any unduly discriminatory conduct to the Commission’s attention.  While I vote to accept PJM’s proposal based on the record before us, I must of course reevaluate whether a tariff is just and reasonable and not unduly discriminatory based on any additional evidence of its implementation that comes before the Commission.

I encourage PJM to modify its site control requirements to address the potential for undue discrimination, consistent with the directions the Commission gave to MISO in a similar proceeding.  As the Commission concluded therein, undue discrimination may be guarded against by affording a customer additional time to demonstrate site control where a change is required late in the study process, and by declining to require site control demonstration for land owned by the transmission owner.[10]  With these modest further reforms, PJM would reduce the risk of undue discrimination, as well as the potential for waiver requests or disputes related to late-stage changes in the path for interconnection that may otherwise complicate implementation of its queue reforms.

My second significant concern with PJM’s proposal is its elimination of operational penalties for late transmission service request studies.  In my view, PJM’s proposal is “consistent with or superior to” the requirements of Order No. 890 only due to the unique circumstances of PJM’s interconnection process.  As the Order notes, “PJM’s proposal allows PJM to move to a more efficient cluster study approach while not disrupting its current practice of processing transmission service requests in the interconnection queue.”[11]  The “reasonable efforts” standard controls the timing of the interconnection requests in PJM’s combined queue, and while this standard may be inadequate incentive for grid operators to process requests on a reasonable timeline, it applies in other regions as well.  As such, the appropriate forum for reconsidering the reasonable efforts standard is the Commission’s broader Notice of Proposed Rulemaking on interconnection reform.[12]

Finally, as discussed above, I am concerned that despite the proposed reforms, PJM’s interconnection process remains too slow to effectively serve customers.  In this regard I note that PJM’s proposed reforms accepted today are but one step upon which several others could conceivably be layered.  Further changes that hold potential to accelerate PJM’s interconnection queue include modifying the threshold at which network upgrades are triggered by the interconnection process,[13] and adjustments to cost allocation for interconnection upgrades such that network upgrade costs are less likely to spur queue withdrawal.[14]  I also encourage PJM and other regions facing similar challenges to consider the potential implementation of a forward-looking interconnection study process pursuant to which interconnection customers connecting to certain parts of the system could be given interconnection cost information on a more advanced basis that is less subject to unpredictable variation based on where a project falls in relation to others in the queue.[15]

In closing, I note once again that the connection between regional transmission planning and interconnection processes cannot be overstated.  Forward-looking planning of transmission infrastructure with significant regional benefits will greatly reduce the strain on the interconnection process.  A well-planned transmission system would yield a simpler study process for PJM, and would facilitate an interconnection process less likely to trigger disproportionately high-cost network upgrades, spurring queue withdrawals and further delays.  Conversely, the need for further interconnection reforms will be heightened should the region fail to coalesce on a portfolio of beneficial projects that significantly reduce the strain on the interconnection process.  

I encourage PJM to prioritize working with the states in its region to come together around a shared vision to facilitate the construction of needed transmission projects in a manner that all can agree is fair, such that it can make significant progress toward building necessary regional transmission infrastructure as we have recently seen in other regions.[16]  Given the gravity of PJM’s interconnection queue challenges, its efforts to address its clogged interconnection process should be an ‘all hands on deck’ moment, with the RTO using every conceivable tool at its disposal to process its queue faster.  That includes hiring more staff, paying more to attract necessary personnel, and pioneering new and creative techniques to alleviate the backlog.  Absent such actions, it is incumbent on the Commission to continue its assessment of PJM’s interconnection and transmission planning processes to ensure that they remain just and reasonable.

For these reasons, I respectfully concur.