Advanced Energy Perspectives

The PJM electricity market faces a capacity shortfall, due to rising demand and a slow and inefficient interconnection process. As millions of people across the region face rate hikes due to this capacity shortfall, the states that are part of the PJM market are seeking new ways to take action to help keep power affordable and reliable. 

In the face of these challenges, some stakeholders are seeking to attract more natural gas power plants to PJM states. However, natural gas power plants are not the solution to this crunch. (One reason for this is the gas turbine supply chain, which is currently stretched to a breaking point: Gas turbines are being ordered up to eight years in advance due to record demand.) State lawmakers and regulators need to expand capacity quickly, and they need to tap non-gas solutions to do so. 

Last May, the Federal Energy Regulatory Commission issued Order No. 1920, a landmark order requiring all transmission providers to engage in multi-value long-term regional transmission planning. The order grants states significant opportunities to engage in this process. In December, the Commission issued Order No. 1920-A, responding to issues raised on rehearing (where parties can argue that the Commission should have ruled differently on specific issues in the final order). Order No. 1920-A expanded the role of states in the planning process. Since then, all the multi-state RTO/ISO regions have requested extensions, giving states and transmission providers additional time to craft compliance plans. States can use this extra time to work together to identify priorities and reach alignment on key questions raised by the order.

Below, we outline the key decisions and actions states can take to influence compliance and to engage in implementation once the planning process begins.

The process of integrating new electricity sources to the power grid—known as “generator interconnection”—must be reformed to realize the full potential of widely available and affordable energy resources like wind, solar, and energy storage technologies. Especially at a time of rising electricity demand, the results of a reformed interconnection process are paramount to energy deployment across regions, impacting affordability and reliability for customers of all classes. 

Today, United published a new report authored by Power Advisory entitled How Interconnection Reform Can Accelerate Clean Energy Deployment, which quantifies the advanced energy deployment gains states could see from implementing interconnection process improvements. The key message of the report? Improving interconnection processes can significantly boost energy deployment, delivering much needed electricity generation and economic benefits.