Many energy projects fizzle out long before they’re ready to flip the switch, but the federal government is working to change that.
New projects wanting to connect to the U.S. power grid must first go through impact studies required by the system operators that transmit electricity from generation plants via the grid to regional or local distributors. The studies determine whether grid updates are needed to accommodate the projects and how much the updates will cost, says Nick Manderlink, a graduate student at the University of California, Berkeley’s Goldman School of Public Policy and research assistant at the Lawrence Berkeley National Laboratory. While the studies are being done, the projects are listed in the Department of Energy’s interconnection queues.
“It is very clear that most projects submitted to the queues never see the light of day.”
—Nick Manderlink, Lawrence Berkeley National Laboratory
“It is very clear that most projects submitted to the queues never see the light of day,” Manderlink told a session on energy policy at NCSL’s 2024 Base Camp. “Most projects end up withdrawing their application prior to executing an interconnection agreement or reaching commercial operations.”
Manderlink and the research team at the Lawrence Berkeley lab identified three problems within the process: low completion rates; a lengthy interconnection process; and cost.
In a 2023 review, the team found the interconnection process took nearly five years across all transmission system operators. “That compares with less than two years in the mid-2000s and around three years in 2015,” Manderlink says. “On average, we found interconnection costs have doubled for projects that completed all studies and signed an interconnection agreement.”
FERC Orders
The Federal Energy Regulatory Commission, also known as FERC, has issued multiple orders to try to resolve some of these issues, says Robert Thormeyer, director of the agency’s State, International and Tribal Affairs Division. Order 2023, the Improvements to Generator Interconnection Procedures and Agreements, requires all system operators to connect projects to the grid in a timely manner, with projects reviewed on a “first ready for service” basis, he says, and projects studied in groups instead of just one at a time.
Order 2023 also penalize transmission providers if they are late and requires them to consider new technologies when reviewing projects, Thormeyer says.
Another solution, Order 1920, requires a 20-year horizon plan with an update every five years. It also allows transmission providers to apply new technologies when they go through these updates. The order is meant to accommodate state laws and account for the planning the states already have done, Thormeyer says.
“We’re seeing state laws on all these issues, and it doesn’t really matter what your state is doing,” he says. “We want to be sure that what your state is doing is accounted for in the planning of the future.”
Still another order, Backstop Transmission Siting, or Order 1977, was a response to the Infrastructure Investment and Jobs Act, which clarified that FERC has limited authority over power lines. The order says that projects in the DOE’s National Interest Electric Transmission Corridors can bring their applications to FERC for review if states do not act for more than a year after one is filed or if an application is denied, Thormeyer says.
“We don’t actually do anything until we get an application before us,” Thormeyer says. “That rule is now effective, and we have yet to enforce it because the Department of Energy has not yet made their designations final.”
A DOE road map includes 35 potential solutions to help reduce interconnection queue backlogs, Manderlink says. The four main goals: prioritizing data access and transparency; making meaningful process improvements and reducing study timelines; improving cost allocation and lowering costs for electricity consumers; and maintaining a reliable and resilient grid.
Hannah Edelheit was an intern in NCSL’s Communications Division.