Projects that reached commercial operation in 2025 spent an average of eight years in PJM's interconnection queue - a figure that exposes a deep mismatch between the urgency of U.S. grid modernization and the pace of the regulatory machinery meant to enable it. Battery storage, widely regarded as the most flexible tool for grid reliability and decarbonization, is caught squarely in this bottleneck. Despite a wave of reform under the Federal Energy Regulatory Commission (FERC), a backlog stretching into 2026 continues to impede deployment timelines, distort project economics, and suppress capacity market signals.
The Scale of the Problem
The interconnection queue backlog is not a niche administrative issue. By late 2024, total U.S. interconnection queue capacity stood at approximately 2,300 GW - the first year-over-year decline in at least a decade, yet still more than twice the country's current installed generation capacity, according to Lawrence Berkeley National Laboratory's annual "Queued Up" review. That modest decline, however, was driven largely by a freeze on new applications at two of the country's largest grid operators - PJM and CAISO - rather than genuine throughput improvements.
The consequences are measurable in cost. Analysis commissioned by GridLab1Analysis commissioned by GridLab and executed by Aurora Energy Research found that if just 10% of the 107 GW of land-based renewables in PJM's queue before 2024 had been built in time for the 2026-2027 capacity auction, it would have added 1.5 GW of net supply and saved PJM consumers approximately $3.5 billion. PJM's 2026-2027 capacity auction hit the FERC-imposed price cap of $329 per MW-day across its entire footprint, reflecting acute supply-side pressure that faster interconnection could have partially relieved.
For battery storage specifically, the dynamics are especially consequential. Approximately 50 GW of BESS capacity currently sits within MISO's total 650 GW interconnection queue, while NYISO's overall backlog has doubled from 176 projects in 2018 to 350 by 2025 - with only around 9% of BESS submissions ultimately advancing to commercial service.
FERC's Reform Architecture: What Has Changed
FERC's Order 20232Order 2023, issued in July 2023, marked the most significant overhaul of generator interconnection procedures in decades. Its core provisions target the structural flaws that created queue congestion.
From Serial to Cluster Studies
The prior "first-come, first-served" serial study model required each project to wait in line for individual analysis - a process that allowed speculative filings to occupy queue positions ahead of viable projects while network upgrade costs cascaded unpredictably across applicants. FERC Order 2023 replaced this with a "first-ready, first-served" cluster study framework, requiring transmission providers to study groups of projects simultaneously rather than sequentially. This approach reduces redundant analysis, surfaces shared upgrade costs earlier, and prioritizes applications backed by demonstrated site control and financial readiness.
The rule also mandated deadline enforcement, imposing penalties on transmission providers that fail to complete interconnection studies within set timeframes. It established co-location standards allowing battery storage to share a single interconnection request with a co-located generation asset, removing a longstanding barrier for hybrid solar-plus-storage projects.
FERC's Directive to PJM
In July 2025, FERC ordered PJM - the largest RTO in the country, serving more than 65 million people across 13 states and Washington, D.C. - to revise its compliance plan for Order 2023. The commission determined PJM's existing interconnection framework did not fully meet the rule's requirements. FERC also directed PJM to report by January 19, 2026, on the status of its proposals to speed up generating capacity additions, including an expedited interconnection process for shovel-ready projects and enhanced load forecasting measures. PJM expects to begin processing new interconnection requests under its reformed system in 2026, with a target of reviewing an additional 63,000 MW of requests through that year.
RTO Implementation: A Fragmented Landscape
Across regions, the translation of FERC policy into operational reform has been uneven - a pattern that compounds difficulty for developers active in multiple markets.
MISO has moved aggressively on financial gatekeeping. Its Definitive Planning Process (DPP) reforms, effective 2024, doubled upfront deposits and introduced automatic withdrawal penalties - requiring a 200 MW battery project to commit approximately $1.9 million before studies begin, with up to $1.6 million at risk if the project exits during Generator Interconnection Agreement negotiations. The intent is clear: deter speculative filings and reward project readiness. MISO's DPP-2025 cycle launched in January 2025 with 78 GW of capacity seeking interconnection.
NYISO adopted a parallel batch process for all projects submitted after January 2023, bifurcating the queue into a "Fast Track" for mature, grandfathered projects targeting commercial operation before 2030 and a "Cluster Study" track for newer submissions with projected commercial operation dates between 2027 and 2032. Under the new approach, NYISO expects projects entering in Q3 2024 to begin construction by June 2026 - approximately 50% faster than the prior process.
CAISO has implemented a "first-ready, first-scored" system that goes beyond readiness to consider alignment with California's state resource plans. This approach reflects the trade-off between open-access principles and the reality that constrained regions with ambitious policy mandates require more discerning queue management. ERCOT, operating outside FERC jurisdiction, maintains the fastest interconnection process - but BESS interconnection applications in ERCOT fell 50% in the second half of 2025 compared to the first half, driven by policy uncertainty including the loss of key tax credits.
For developers operating across RTOs, divergent deposit structures, cluster study criteria, cost-allocation methods, and timeline norms create a planning environment that remains difficult to navigate, even as individual reforms advance.
The Persistent Gap: Reform vs. Real-World Throughput
The most critical insight from Lawrence Berkeley National Laboratory's December 2025 review is also the most cautionary: the decline in total U.S. queue capacity observed in 2024 was not primarily attributable to increased processing efficiency, but rather to two major RTOs halting new applications and to a 47% drop in solar and 32% drop in battery storage capacity entering queues compared to 2023 - itself a product of financing hesitancy, tariff concerns, and regulatory uncertainty.
In other words, the queue shrank partly because fewer projects applied - not because the system got faster. The structural reforms under Order 2023 will take several more years to demonstrate their full impact, as most projects currently in the queue were submitted before the rule took effect.
Three systemic barriers remain underaddressed:
- IT and data infrastructure: Inconsistent data standards across RTOs slow interregional coordination and extend study timelines. Investment in modern modeling tools and software is a prerequisite for meeting promised processing speeds.
- Permitting alignment: Interconnection reform does not automatically accelerate the physical infrastructure required to implement it. Permitting and constructing the transmission upgrades - new lines, substations, and transformers - often takes longer than the study process itself, and requires coordination among federal, state, and local agencies.
- State-level integration: Storage developers consistently flag the gap between federal interconnection rules and state-level permitting regimes for siting, environmental review, and land use authorization. Bridging that gap requires deliberate policy alignment beyond FERC's jurisdiction.
As covered in Energy Tech News's prior analysis of the Trego 200MW BESS case near Reno, even projects that successfully clear interconnection study phases can face additional delays from environmental review requirements and inconsistent inter-agency coordination.
Implications for Developers, Utilities, and Investors
For storage developers, the near-term priority is recalibrating project schedules to reflect post-reform queue norms rather than pre-reform assumptions. Cluster study timelines, increased deposit requirements, and milestone-based withdrawal penalties fundamentally alter the risk-reward calculus of holding queue positions. Projects entering closer to final investment decision - with site control established, offtake arrangements in place, and financing largely secured - are best positioned under reformed rules.
For utilities, the interconnection backlog directly affects capacity planning, reliability credit procurement, and capacity auction participation. The inability to bring storage online within planning windows is not a peripheral risk; it forces utilities to retain legacy resources longer than anticipated, increasing both costs and emissions.
For investors and equipment suppliers, clarity on interconnection timelines remains a prerequisite for scaling manufacturing and labor capacity. The signal reformed queues need to send - predictable study completion, reduced withdrawal rates, earlier commercial operation dates - has not yet materialized with sufficient consistency to justify major supply-chain commitments.
Outlook
Continued iterations of FERC orders and regional implementation are likely through 2026 and beyond, as RTOs provide feedback on cluster study outcomes and developers push for stronger cross-jurisdictional coordination. Policymakers may also weigh whether performance-linked incentives or penalties tied to queue throughput are needed to ensure rule changes translate into measurable deployment acceleration.
The interconnection queue backlog is, at its core, a reliability and economic issue as much as an administrative one. Until the gap between policy intent and operational throughput closes, the pace of U.S. grid transformation will remain constrained by the very machinery designed to enable it.
