E-2: Commissioner Chang’s Concurrence to Order Accepting Compliance in Part and Directing Further Compliance re PJM Interconnection, L.L.C.

Docket No. ER24-2045-004

I concur in today’s order on PJM Interconnection, L.L.C.’s (PJM) Order No. 2023 compliance filing.  I write separately to highlight the broader concerns that have emerged across recent interconnection matters in PJM.  These issues, reflected in RWE[1] and Amelia,[2] underscore the importance of ensuring that PJM’s interconnection study procedures and network upgrade cost allocation practices are clearly grounded in its filed tariff.  I strongly encourage PJM to take the opportunity to bring clarity, transparency, and predictability to its interconnection process as it prepares for its next compliance filing in response to today’s order.

In RWE, the Commission addressed a complaint regarding PJM’s application of network upgrade cost assignment concepts that were reflected primarily in the PJM manuals.  In that case, the developer raised concerns that PJM relied on internal methods and interpretations, rather than tariff‑specified criteria, to determine both the scope of necessary network upgrades and the extent of RWE’s cost responsibility for those network upgrades.[3]  This level of unpredictability and variation not only made it difficult for the developer to understand and validate PJM’s determinations but also complicated the Commission’s review.

Similarly, in Amelia, the record reflected PJM’s use of “regional topology upgrades” and a corresponding discount factor method for assigning network upgrade costs.  These approaches are not well defined in the tariff or manuals, which in turn left developers uncertain as to how network upgrade decisions were made or how the costs of those network upgrades were assigned.  The Commission agreed with PJM that the use of this type of analysis was consistent with the tariff’s requirement that PJM allocate costs “pursuant to each New Service Request’s contribution to the reliability violation identified on the transmission system.”[4]  But, even though the analysis performed by PJM was consistent with its tariff requirements, the developers in this study group still faced uncertainty regarding both the cost and timing of network upgrades as PJM determined the least-cost regional solutions to address the reliability violations caused by the cluster, which resulted in the elimination of otherwise-required network upgrades.[5]

The questions raised in these cases are closely connected to the issues now before the Commission in PJM’s Order No. 2023 compliance filing.  In this proceeding, PJM proposes to use a proportional impact method for network upgrade cost allocation that stakeholders argue is unclear and could assign network upgrade costs to projects with little or no actual contribution to the underlying reliability violation.  The compliance order directs further compliance from PJM to provide tariff revisions that describe “how the costs of each system network upgrade type will be allocated among the interconnection customers within the cluster that are shown through technical analyses to contribute to the need for that discrete network upgrade.”[6] 

Taken together, RWE, Amelia, and the Commission’s directives in today’s order reveal a consistent theme: PJM’s interconnection process will benefit from clearer, more transparent, and more tariff‑anchored study procedures.  As PJM develops its next compliance filing, I encourage PJM to ensure that the proposed study methods, network upgrade selection logic, and network upgrade cost allocation framework are clear and well-described in its tariff.  Providing developers with a stable and predictable set of tariff‑based rules will reduce the likelihood of disputes like those seen in RWE and Amelia, support more efficient administration of the queue, and ultimately promote a more durable and equitable interconnection process. 

For these reasons, I respectfully concur.