In 2023, PJM had over 200 GW of generation capacity in its interconnection queue — more than the total installed capacity of the ISO. MISO, CAISO, and ERCOT had similar dynamics. The queue has become the bottleneck.
What FERC Order 2023 changed
FERC Order 2023, finalized in 2023, moved every major ISO toward a cluster-study process with commercial readiness deposits and firm site control requirements. The intent was to filter speculative projects out of queues. The result has been mixed: queue clearance has accelerated in some regions (MISO), stalled in others (CAISO), and the cost allocation rules have become more complex everywhere.
Key practical changes:
- Higher deposits (often $2–5/kW) that scale with project size
- Required demonstration of site control, power purchaser interest, and permitting progression
- Withdrawal penalties that make queue manipulation more costly
- Cluster-study assignments that allocate network upgrade costs among cluster participants
The cost-allocation problem
When a cluster of 10 projects each requires a portion of the same transmission upgrade, the cost is typically allocated pro rata by MW. But if 3 of those projects withdraw after study results come back, the remaining 7 projects inherit their share of the upgrade cost. Modeling for this attrition is critical.
Our approach: assume 30–40% cluster attrition in underwriting. If the project still pencils with the redistributed upgrade costs, it's viable. If it only works with full cluster participation, it's a fragile project.
Transmission service requests vs energy-only service
Developers often have a choice between requesting Network Resource Interconnection Service (NRIS) — which provides firm transmission deliverability — and Energy Resource Interconnection Service (ERIS), which allows power injection without firm delivery. NRIS is required for capacity market participation in most ISOs but can add $10–30M to a project's study costs.
For a merchant energy project that doesn't need capacity payments, ERIS may be sufficient and significantly cheaper.
The Axis view
Queue management is now a distinct competency. Developers succeeding in this environment have learned to pick fewer, better sites; negotiate aggressively with neighbors in their cluster; and maintain optionality through multiple projects in different ISO regions. Treating the queue as a passive waiting period is no longer viable.
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