Transmission Planning and Interconnection Queue Reform

Improved transmission planning and interconnection queue reform can help accelerate the interconnection of low-cost renewables and energy storage, lower high capacity prices, and bring down system costs.

Table Of Contents
  1. Why This Matters
  2. Policy Solution
  3. Model Policy Features
  4. Potential Limitations & Pitfalls
  5. Complementary Policies
  6. Additional Information
  7. Examples
  8. Resources
COMMUNITY BENEFITAffordability, Decarbonization
KEYWORDSClean energy, Electricity, Grid infrastructure
REGIONFederal, Regional, State
AFFORDABILITY STRATEGYUtility Reform: Cost Containment, Utility Reform: Energy Transition
OVERSIGHTFERC, Regional Transmission Operators, Utility Commissions, Energy Agencies
POLICY MECHANISMLegislation, Regulation, Executive, Litigation

Why This Matters

Electricity transmission infrastructure plays a central role in the electric grid, connecting utility-scale power generation to load centers like cities through high-voltage power lines. However, delays in transmission system planning, expansion, and interconnection can have ripple effects on the power sector, driving up systemwide costs. Increasing transmission system costs—including replacement of aging infrastructure, maintenance, and expansion—have been one of the drivers of electricity price growth in recent years.1 Slow and inefficient transmission planning and interconnection processes—which determine the timeline and costs for connecting new generation and energy storage to the electric grid—have had significant impacts on electricity prices as well: delayed interconnection timelines compounding with increasing energy demand have led to a shortfall in power capacity in many areas, driving capacity prices to record highs. Interconnection timelines for new utility-scale electricity resources have more than doubled in the last twenty years. In part because of these delays, only 19% of proposed projects (14% of proposed capacity) are built nationwide.2 The vast majority of projects in these interconnection queues are renewable energy and energy storage. The siting of new transmission infrastructure itself has also faced long delays due to challenges in the permitting process, including community resistance, resulting in part from inadequate community engagement and community benefit agreements. The U.S. Department of Energy estimates that accelerating transmission buildout across the country—and connecting low-cost renewables in rural areas to power high loads in dense urban areas—would save $270–$490 billion by 2050 while accelerating decarbonization of the power sector.3 
The impacts of these delays are evident in places like the PJM Interconnection, which oversees regional transmission in all or part of 13 states in the Mid-Atlantic and Washington DC. PJM has the country’s longest interconnection queues, driving up project timelines and costs, and a shortage of peak capacity, which is being exacerbated by growing summer electricity demand and the rapid expansion of data centers. The PJM capacity auction—which pays resources to be available in the case of peak demand—reached a record $16.1 billion dollars in the summer of 2025, 22% higher than the previous year’s record high. This price would have been higher had not Governor Josh Shapiro of Pennsylvania negotiated with PJM for a price cap.4 Meanwhile, the Trump Administration has ordered aging, expensive, high-emission fossil fuel plants to stay online past their planned retirement date, claiming they are needed to meet reliability needs in PJM5—while simultaneously withdrawing a federal loan for a transmission project6 that, in the second phase, was meant to deliver renewable energy to PJM.7

Policy Solution

Decision-making regarding transmission planning, siting, upgrades, and interconnection occurs at many jurisdictional levels, including utility commission oversight of in-state utility-owned transmission lines; state-level energy planning; statewide or multi-state transmission markets and planning decisions overseen by non-profit regional transmission operators (RTOs) or independent system operators (ISOs); interstate transmission regulated by the Federal Energy Regulatory Commission (FERC); and permitting decisions from the local to federal level; among others. FERC has introduced significant regulatory reforms to improve transmission planning and interconnection processes (e.g. FERC Order 1920,8 to improve long-term planning, and FERC Order 2023,9 to accelerate interconnections), and ensuring effective implementation of these Orders should improve planning and interconnection processes. Additional core policy and regulatory improvements fall into the following categories: 

  1. Consider alternatives to transmission expansion: require an analysis of alternatives when a need for new transmission is identified, such as technological upgrades to existing transmission and utilization of energy storage or distributed energy resources to defer transmission investments;10 
  2. Accelerate interconnection timelines for new clean resources; 
  3. Introduce cost-containment measures: these may include capacity market price caps and protections against cost-shifting from new loads like data centers; and 
  4. Expand community engagement, community benefit agreements, and community ownership opportunities.

Model Policy Features

A broad suite of policy measures at multiple jurisdictional levels may play a role reforming transmission planning and interconnection processes, and in recent years FERC has issued numerous rulemakings to improve planning and reduce interconnection backlogs. In addition to ensuring effective, timely implementation of these FERC orders, the following policy measures can help accelerate the interconnection of new, clean energy resources while reducing customer costs and minimizing the community impacts of new transmission buildout.

Consider Alternatives to Transmission Expansion

When new transmission needs are identified at either the utility commission or RTO level, typically during long-term planning processes (before reaching the siting and permitting stage):

  • Require an assessment of whether grid-enhancing technologies (such reconductoring or dynamic line ratings) can defer the need for new transmission.11
  • Require an assessment of whether non-wires alternatives such as energy storage, energy efficiency, virtual power plants made up of distributed energy resources such as demand response and solar+storage, or other technologies can defer the need for transmission investments—and accompanying utility-scale power plants. Include community input to inform these decisions.

Accelerate the Interconnection of Clean Energy

Reforming and accelerating the interconnection queue process can be achieved through:

  • Ensuring effective implementation of and compliance with FERC orders, such as Order 1923, which sets a 150-day deadline on the initial interconnection study period, and requires a cluster analysis of the impact of multiple resources requesting interconnection rather than assessing needs one-by-one. Other measures include, for example, a requirement that energy storage be evaluated under reasonable operating conditions—namely, charging at times of low demand and discharge at times of high demand—rather than the opposite, which had previously triggered unnecessary grid upgrades.12 
  • Enable new clean energy resources, primarily energy storage, to utilize existing interconnection agreements at retiring or under-utilized power plants.13
  • For state- and utility commission-level transmission planning processes, require that any buildout aligns with state-level greenhouse gas and renewable energy targets—that is, does not require ratepayers to pay for transmission to interconnect new gas plants that run contrary to state climate goals, and ensures transmission investments align with long-term renewable energy interconnection and grid balancing needs, inclusive of the ability for distributed energy resources to meet these needs instead. 
  • Incorporate advanced modeling software to accelerate the transmission study process, as has already been demonstrated in some regions.14

Introduce Cost Containment Measures

A range of measures aimed at transmission planning accountability and cost containment can help improve affordability impacts:

  • State governors can put pressure on—or litigate against—regional grid operators to institute cost-containment measures, as was achieved by Governor Josh Shapiro who litigated against PJM to institute price caps during capacity auctions.15 
  • Require that new loads (e.g. data centers or advanced manufacturing) bring their own clean energy and pay for their own transmission upgrades. FERC has announced a proposed rulemaking on this topic,16 although it is not expected to include any requirements that co-located energy projects are clean and renewable.
  • Create a transparent and equitable cost-allocation process for new transmission investments to ensure ratepayers are not overcharged for transmission upgrades. Updates to this process are required as part of compliance with FERC Order 1920, which is ongoing, and which may provide opportunities for stakeholder input at the state level.17

Require Early, Consistent Community Engagement and Expand Community Benefit Agreements

Increased community engagement and transparency can contribute to transmission development that reflects community priorities and helps direct benefits to affected communities.

  • For both transmission planning processes (e.g. How much transmission do we need?) and transmission siting processes (e.g. Where does it go?), require early, regular, and meaningful community engagement to help shape decisions about what alternatives to transmission may be considered (e.g. more distributed energy resources) and, if transmission is pursued, where it should be sited. Many of these permitting decisions occur at the state and local level.
  • Co-design community benefit agreements with affected communities, including consideration of workforce training, direct ratepayer benefits/discounts, or other direct compensation and local investments for those living near transmission infrastructure. 
  • Consider models of co-ownership of transmission lines with affected communities or Tribes, providing direct benefits in terms of returns on transmission investments for nearby communities.18,19
  • Require that utility commissions and grid operators provide financial support, such as intervenor funding, for community members, consumer advocates, and non-profits to participate in transmission planning processes.20
  • Incorporate community and societal benefits into transmission planning processes, such as the opportunity for transmission upgrades to facilitate retirement of polluting peaker power plants in environmentally overburdened communities.

Potential Limitations & Pitfalls

  • The many overlapping jurisdictions affecting transmission planning, siting, and interconnection result in an extremely complex system of planning and decision-making, making reform processes slow and challenging.
  • RTO and ISO processes are often either closed to the public or opaque and difficult to participate in, making it challenging for a broad range of stakeholders to weigh in on decision-making.
  • Measures to accelerate the interconnection of new resources can also support the rapid interconnection of new fossil fuel generation, locking in greenhouse gas emissions from these facilities for years to come. This has already been seen in interconnection improvements in PJM, which have accelerated timelines for some storage but primarily accelerated the interconnection of gas plants.21 
  • Transmission-centered planning often fails to account for distributed energy resources—both in front of and behind the meter. These omissions can lead to a build-out of resources that fail to realize cost savings, increased resilience, or other benefits associated with distributed energy adoption pathways.

Complementary Policies

A number of complementary policies can help minimize the affordability and greenhouse gas impacts of electricity transmission, including:

  • Cost containment for data centers and other major loads to protect ratepayers from shouldering new generation and transmission upgrade costs for interconnecting new major loads.
  • Public-private transmission financing to reduce transmission costs passed on to ratepayers.
  • Limiting gas infrastructure investments to minimize the buildout of new gas power plants which either lock in long-term greenhouse gas emissions or risk becoming a stranded asset.
  • Comprehensive distributed energy resource valuation, demand response programs, and virtual power plants to ensure that solar, storage, demand response, and other resources are properly valued—and compensated—for their value in long-term planning and defer transmission investments when appropriate.

Additional Information

In October, 2025, Secretary of Energy Chris Wright directed the Federal Energy Regulatory Commission (FERC) to initiate a rulemaking to accelerate large load interconnection. The Advanced Notice of Proposed Rulemaking suggested considerations such as expediting interconnection of large loads that agree to be curtailed and/or are hybrid facilities co-located with energy generation or storage, and a requirement that large loads be required to pay for any necessary transmission upgrades, among other measures.22

Examples

1. FERC Order 2023 – FERC Order No. 2023: Improvements to Generator Interconnection Procedures and Agreements

Details:23

  • Requires grid operators to meet deadlines for interconnection studies, including 150 days to complete the first study process, with penalties for missing these deadlines.
  • Requires grid operators to introduce a “cluster” analysis of new resources and their transmission upgrade requirements, rather than studying each proposed project one-by-one in a serial process.
  • Requires higher levels of readiness, including available financing, for proposed projects to enter the cluster study process. Includes higher penalties for withdrawal from the process.
  • Requires energy storage interconnection upgrades and fees to reflect realistic operation, rather than assuming worst-case charging and discharging operation. 
  • Enables energy storage to be added to any proposed project already in the interconnection queue. 
  • Requires improved notification and processes for projects that may affect neighboring transmission systems.
  • Requires transmission providers to consider the role of grid-enhancing technologies in meeting transmission needs.

LIMITATIONS:

  • Grid operators, such as PJM, have delayed compliance with FERC Order 2023, resulting in new directives from FERC to meet the Order’s requirements.24
  • FERC itself acknowledged that this is just the first step in much broader reforms that are needed in the transmission planning process.25
  • Accelerating interconnection timelines can benefit clean energy resources, and the provisions to support energy storage interconnection are helpful, but many of these measures also accelerate the interconnection of new gas plants, which can contribute to lock-in of greenhouse gas emissions and future stranded asset risks.

Resources

Written: December 2025

  1. Wiser, R., Barbose, G., Cappers, P., Deason, J., Forrester, S., Gorman, W., O’Shaughnessy, E., Hledik, R., Lam, L., and Yan, A. (2025). Factors Influencing Recent Trends in Retail Electricity Prices in the United States What do we know? Where are the gaps? Lawrence Berkeley National Laboratory. ↩︎
  2. Wiser, R., Barbose, G., Cappers, P., Deason, J., Forrester, S., Gorman, W., O’Shaughnessy, E., Hledik, R., Lam, L., and Yan, A. (2025). Factors Influencing Recent Trends in Retail Electricity Prices in the United States What do we know? Where are the gaps? Lawrence Berkeley National Laboratory. ↩︎
  3. Mercer, E. (2024). National Transmission Analysis Maps Next Chapter of US Grid Evolution. ↩︎
  4.  Howland, E. (2025). PJM capacity prices set another record with 22% jump. Utility Dive. ↩︎
  5. Gardner, T. (2025). US orders part of Talen power plant in Maryland to run above limits through end of 2025. Reuters. ↩︎
  6. U.S. Department of Energy. (2025). Department of Energy Terminates Taxpayer-Funded Financial Assistance for Grain Belt Express. ↩︎
  7.  Grain Belt Express (2024). Grain Belt Express Launches Open Solicitation Process to Offer HVDC Transmission Line Capacity Delivering to MISO/AECI. ↩︎
  8. Federal Energy Regulatory Commission. (2024). Building for the Future Through Electric Regional Transmission Planning and Cost Allocation (Order No. 1920). Federal Register, 89, 49280. ↩︎
  9.  Federal Energy Regulatory Commission. (2023). Improvements to Generator Interconnection Procedures and Agreements (Order No. 2023). Federal Register, 88, 52110–52279. ↩︎
  10.  Chavin, S., Knight, P., Shenstone-Harris, S., Zeng, A., Fuzaylov, A. and Hittinger, J. (2025.) Tackling the PJM Electricity Cost Crisis Report. Synapse Energy Economics. ↩︎
  11. Chojkiewicz, E., Paliwal, U., Abhyankar, N., Baker, C., O’Connell, R., Callaway, D., and Phadke, A. (2024). 2035 Report: Reconductoring. GridLab. ↩︎
  12. Advanced Energy United. FERC Order 2023 Toolkit: Highlights from the first leg of the transmission  reform marathon. Accessed: December 8, 2025. ↩︎
  13. Chavin, S., Knight, P., Shenstone-Harris, S., Zeng, A., Fuzaylov, A. and Hittinger, J. (2025.) Tackling the PJM Electricity Cost Crisis Report. Synapse Energy Economics. ↩︎
  14. Weeks, A., Kotwis, S.T., Siegner, K., and Teplin, C. (2025). PJM’s Speed to Power Problem and How to Fix It. RMI. ↩︎
  15. Commonwealth of Pennsylvania. (2025). Governor Shapiro’s Legal Action Against PJM Saves Consumers Billions and Prevents Massive Price Hike Across 13 States. ↩︎
  16. Wright, C. (2025). Ensuring the Timely and Orderly Interconnection of Large Loads: Advance Notice of Proposed Rulemaking. U.S. Department of Energy. ↩︎
  17. Federal Energy Regulatory Commission. (2025). Order No. 1920 Compliance Filings Schedule. ↩︎
  18. Morongo Band of Mission Indians. Clean Energy Initiative. ↩︎
  19. Acadia Center. (2025). Community Powered Progress: A Pathway to Greater Community Participation in Transmission Infrastructure Projects. ↩︎
  20. Sutterman, A., Ahn, E., Ton, P., and de Lamare, J. (2025). Rewiring for Justice–How California Can Power Equitable Transmission & Benefit Frontline Communities. Brightline Defense. ↩︎
  21. Howland, E. (2025). PJM poised to add more storage following surplus interconnection reform. Utility Dive. ↩︎
  22. Wright, C. (2025). Ensuring the Timely and Orderly Interconnection of Large Loads: Advance Notice of Proposed Rulemaking. U.S. Department of Energy. ↩︎
  23. Advanced Energy United. FERC Order 2023 Toolkit: Highlights from the first leg of the transmission reform marathon. Accessed: December 8, 2025. ↩︎
  24. Howland, E. (2025). FERC orders changes to PJM’s grid interconnection process, plus 3 other open meeting takeaways. Utility Dive. ↩︎
  25. Advanced Energy United. FERC Order 2023 Toolkit: Highlights from the first leg of the transmission  reform marathon. Accessed: December 8, 2025. ↩︎