Federal regulators have intensified pressure on U.S. grid operators to accelerate interconnection reforms, even as persistent queue backlogs and aging infrastructure threaten to delay the large-scale battery storage deployments needed to meet grid reliability targets by 2030. The Federal Energy Regulatory Commission (FERC) ordered PJM Interconnection - the nation's largest grid operator - in July 2025 to revise its interconnection study process after ruling that PJM's existing plan did not fully comply with Order 2023, the commission's landmark interconnection reform rule. The action marks the most direct federal intervention yet in a multi-year effort to unclog queues that have left hundreds of gigawatts of battery storage projects waiting for grid access.
Background
The U.S. interconnection crisis has intensified steadily over the past decade, driven by a surge in renewable energy and storage applications that legacy grid procedures were not designed to handle. FERC issued Order 2023 in July 2023 to reform the procedures and agreements transmission providers use to integrate new generating facilities into the grid, adopting measures to reduce backlogs, improve certainty, and ensure access for new technologies.1US Energy Storage: Interconnection Bottlenecks, Data Center Demand, and Policy Shifts - News and Statistics - IndexBox The rule replaced the previous serial, first-come-first-served study process with a "first-ready, first-served" cluster study approach and set deadlines for regional transmission organizations and other transmission providers to complete interconnection studies, with penalties for missed deadlines.
Despite that framework, backlogs have continued to grow. By late 2024, U.S. transmission operators reported more than 2,600 GW of proposed generation and storage awaiting a path to the grid - more than twice the country's current installed capacity. A report from Energy Markets and Policy at Berkeley Lab confirmed nearly 2,600 GW of energy and storage capacity in interconnection approval queues, with solar and battery projects comprising the large majority of the backlog.
Historical throughput data underscore the severity of the problem. Only approximately 19% of projects entering U.S. queues between 2000 and 2018 reached commercial operation, according to Berkeley Lab. Median time from request to operation now averages about five years.
Details
FERC's July 24, 2025, order found that PJM Interconnection must make significant changes to its interconnection compliance plan, as PJM's existing process did not fully satisfy Order 2023's baseline requirements. FERC Commissioner David Rosner described acting on PJM's compliance plan - the last major pending Order 2023 compliance filing - as "a step in the right direction," while noting that further work on interconnection reform is still needed. Crucially, FERC sent the issue back to PJM for a third time, specifically over how it studies battery storage and Grid Enhancing Technologies (GETs). Consumer advocates noted that PJM had been assuming energy storage would draw electricity from the grid during peak-demand periods rather than support it.
FERC gave PJM 60 days to propose changes to its interconnection rules following the July 2025 order. In 2025, PJM reported processing more than 170,000 MW of new generation requests since 2023, with approximately 30,000 MW of capacity remaining in the interconnection transition queue for processing in 2026. Approximately 57 GW of projects have completed PJM's study process and have either signed or been offered generation interconnection agreements, clearing them to proceed to construction. However, many of these projects remain stalled by factors outside PJM's own process.
On the storage deployment side, grid-scale battery storage set a record with 11 GW completing interconnection and reaching commercial operation in 2024, according to Lawrence Berkeley National Laboratory's annual interconnection review published in December 2025. Yet the same report found that battery storage capacity entering the interconnection queue in 2024 declined 32% compared to 2023, driven by political uncertainty, elevated interest rates, tariffs, and local permitting challenges, according to the Solar and Storage Industries Institute. Both CAISO and PJM, two of the largest grid operators, were not accepting new interconnection applications in 2024 as they worked to clear the project backlog and implement process reforms, accounting for 0% of new queue entrants that year after representing nearly 30% in 2023.
Separately, in December 2025, FERC issued a long-awaited order finding PJM's tariff unjust and unreasonable as it relates to co-located load arrangements. The commission directed PJM to establish clear, nondiscriminatory rules supporting co-location of electricity consumers - such as data centers - and generation facilities. While tailored to the PJM region, the order is expected to provide a broader framework for addressing co-location and large-load interconnection issues as similar configurations proliferate nationwide, presenting opportunities for energy storage resources.
Physical infrastructure constraints compound the procedural delays. Transmission upgrades represent the longest element in the interconnection timeline - permitting and building new lines, substations, and transformers often outlasts the study process itself. Clean energy deployment will be essential to meeting an electricity demand surge forecast to require more than 150 GW of additional capacity by 2030, according to Grid Strategies' November 2025 report.
Outlook
Processing the backlog and fully adopting new interconnection procedures will take several more years. While PJM has promised one- to two-year wait times under its reformed cycle, the actual impact of Order 2023 remains to be seen. PJM's new cycle process opens in April, with a one- to two-year review timeline depending on system impact. At the federal level, the U.S. Department of Energy in October 2025 exercised seldom-used authority to issue an advance notice of proposed rulemaking instructing FERC to launch a focused rulemaking on timely interconnection of large loads and co-located arrangements, outlining 14 guiding principles; FERC has been directed to act by April 2026. For developers and investors, the reform trajectory points toward higher project-readiness thresholds, cluster-based study windows, and a narrowing window to secure interconnection agreements ahead of 2030 state storage mandates.
