PJM plans to modify and refile a proposal to revise how capacity interconnection rights (CIRs) can be transferred from a deactivating resource to a new unit after FERC rejected the tariff because of language that would have allowed developers to bypass the commercial operation date deadline (ER25-1128).

The proposal would create a nine-month process for PJM to conduct a replacement impact study on resources inheriting the CIRs from a deactivating unit and for an interconnection agreement to be offered. It would allow replacement resources to proceed through the expedited study process if minor network upgrades are identified and would not bar any resource class, thus allowing storage to receive CIRs. The revised tariff language will be brought to the Members Committee for endorsement Sept. 25. (See PJM Stakeholders Endorse Coalition Proposal on CIR Transfers.)

Stakeholders who supported the changes when the Planning Committee first endorsed the language in 2024 argued it would allow gas generators deactivating amid state clean energy policies to be replaced more quickly.

PJM Senior Manager of Interconnection Projects Jason Shoemaker told the PC that FERC signaled support for the overall proposal but identified two areas of concern: exempting resources with long development times from the COD requirement, and a one-time process for developers to request an indefinite delay for their CODs.

In its order rejecting the initial proposal Aug. 8, the commission faulted PJM for allowing developers to request a delay in transferring their CIRs without any time limit, which it said could allow resource owners to effectively withhold CIRs and create barriers to new entry. The commission said that undermines the RTO’s stated goal of allowing more resources to come online ahead of a capacity deficiency identified in the 2030 time frame.

“We find that PJM’s lack of a maximum time limit for the one-time option for an extension of a replacement generator resource’s commercial operation date regardless of cause renders PJM’s proposal unjust and unreasonable because it undermines the purpose of the generator replacement process,” the commission wrote. “That is, the main purpose of the generator replacement process is to avoid duplicative study costs and operational costs that otherwise would occur when the request to replace an existing generating facility must proceed through the interconnection study queue process, which will in turn avoid delaying the replacement of older resources with more efficient and cost-effective resources.”

The revised language would set the COD requirement at the greater of four years from when the developer submitted an application to construct a replacement resource, or three years from the requested deactivation date of the original resource.

Developers could request an alternative COD during the final agreement negotiation process, but they would have to demonstrate why the requirement should be shifted — akin to the milestone extensions permitted in the generation interconnection agreement process.

After the interconnection study is complete, developers could submit changes to the project to mitigate material adverse impacts and potentially reduce the network upgrades they are assigned. The submission would have to be made within 15 business days of receiving the study results and could be done only once. PJM would retool its analysis with the changes.

The commission also wrote that it saw the logic behind allowing generators with long development timelines some flexibility in their COD requirement but said the language could be ambiguous. While it did not cite that as a rationale for rejecting the proposal, FERC recommended that PJM include more specific language in any refiling.

“We also agree with PJM’s goal of offering replacement generation resources that face long lead times a certain degree of flexibility with respect to achieving commercial operation and agree that such resources ‘can make a significant contribution to meeting resource adequacy needs, at a time when PJM needs additional resources to maintain reliability,’” the commission wrote.

The COD exemption for resources with “industry-recognized significant construction time frames” was eliminated from the proposal.