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Beyond BYOG: Fundamental Interconnection Reforms are Still Needed

In a new Issue Brief, ACORE calls for renewed attention to the critical need for interconnection reforms to efficiently connect much needed generation and storage to the grid.

There are multiple opportunities to improve this process, with the most critical reform being the holistic integration of transmission planning (both regional and interregional) with the load and generation interconnection processes. Such an approach is much more efficient and cost-effective than siloing these processes, and it would provide greater certainty for interconnection customers on their network upgrade costs.

This July, the nation celebrated not only its 250th birthday, but the third birthday of Order No. 2023, the Federal Energy Regulatory Commission’s unanimously approved landmark order to improve the process for interconnecting generation and storage to the grid.

Although the implementation of the Order is still underway, and there are now fewer projects awaiting interconnection, many difficulties are far from resolved – including high and unpredictable network upgrade costs and long wait times, and the inefficient siloing of the generation interconnection process from transmission planning in most regions. Concerns about reliability have led some regional grid operators to turn to discriminatory queue-prioritization schemes that further complicate queue processes and miss the mark on needed reforms.

Along with federal and state policymakers, FERC understandably focused on addressing the complexities of the interconnection process for “large loads” or in the parlance of the North American Electric Reliability Corporation, “computational loads.” In June, the Commission issued a series of “Show Cause Orders” asking each Regional Transmission Organization and Independent System Operator to either explain how their existing tariffs address the unique features of interconnecting these large customers or propose revisions to their tariffs to do so.

With the important Show Cause Order process underway for load interconnection, we cannot ignore the ongoing need to further improve the generation interconnection process. To ensure sufficient power, many data centers are building their own generation and storage facilities – either directly collocated or electrically proximate – a practice often referred to as “Bring Your Own Generation (BYOG)” or ideally, “Bring Your Own New Clean Energy (BeYONCE).” This paired load and generation can reduce stress on the grid, and should be jointly studied in the interconnection process, as addressed in the Show Cause Orders.

But BYOG and BeYONCE alone are not sufficient to form a comprehensive policy to meet the rapidly accelerating demand for electricity. Broader grid expansion and interconnection reforms are necessary to minimize costs and ensure reliability.

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