Power & Policy No. 01 · Federal · Federal Energy Regulatory Commission (FERC)
FERC Order No. 2023 replaced first-come interconnection with first-ready
The federal interconnection process moved from serial study of every request to cluster study of ready projects, with firmer deposits, firmer deadlines, and penalties on the transmission provider for late studies.
- Utility interconnection
- Transmission planning
- Grid reliability
Not legal advice
This series is published for general information. It is not legal advice, regulatory advice, or tax advice, and it does not create any professional relationship. Rules change, apply differently by jurisdiction, and turn on facts specific to each project. Consult qualified legal, regulatory, and tax counsel before acting.
The Intelligent Infrastructure Review · Published August 1, 2026 · Record checked August 1, 2026 · 12 min read
In this installment
What first-ready, first-served actually requires of a project — site control, deposits, withdrawal penalties, and cluster windows — and how it changes when a large load or generator can realistically expect an interconnection agreement.
Policy or regulatory development
In July 2023 the Federal Energy Regulatory Commission issued Order No. 2023, a final rule overhauling the generator interconnection procedures and agreements in transmission providers' tariffs. Order No. 2023-A addressed rehearing requests in March 2024. Transmission providers filed compliance tariffs, and the reformed process now governs most new interconnection requests on FERC-jurisdictional systems.
Jurisdiction
Level
Federal
Authority
Federal Energy Regulatory Commission (FERC)
Where it applies
Public utility transmission providers with FERC-jurisdictional open-access transmission tariffs, including RTOs and ISOs. It does not directly govern distribution-level interconnection, which remains with state commissions, or non-jurisdictional systems such as most of ERCOT's intrastate grid.
Who is affected
- Generation and storage developers
- Requests are studied in clusters on a fixed calendar rather than one at a time, and entry requires demonstrated site control and larger deposits that are at risk if the project withdraws.
- Large loads seeking service
- Load is not interconnected under these procedures, but the generation and storage a campus depends on is — so an on-site or contracted resource inherits the cluster calendar.
- Transmission providers, RTOs, and ISOs
- Study deadlines carry financial penalties, which pushes queue administration from a best-effort function to a scheduled obligation.
- Investors and lenders
- At-risk deposits and withdrawal penalties move real money earlier in development, before a project has an executed interconnection agreement.
- EPC firms and project teams
- Study results and network upgrade assignments now arrive on a cluster cadence, which changes when procurement and construction sequencing can be locked.
What changed
- Serial, one-at-a-time study of interconnection requests was replaced with a cluster study process that evaluates a group of requests together on a defined cycle.
- Entry into the queue requires more demonstrated readiness, including site control or an increased deposit in place of it, so speculative requests are more expensive to hold.
- Commercial-readiness deposits increase through the process, and withdrawal penalties are assigned to projects that leave and shift study costs onto those that remain.
- Transmission providers face penalties for missing study deadlines, tying the study calendar to a financial consequence.
- Technology-specific provisions allow more than one resource to share a single interconnection request and point of interconnection, and set out how storage and hybrid configurations are modeled.
- Order No. 2023-A clarified and modified parts of the rule on rehearing, and individual transmission providers implemented it through compliance filings that differ in detail from region to region.
Official sources
- Federal Energy Regulatory Commission · Order No. 2023 — Improvements to Generator Interconnection Procedures and Agreements (final rule) · July 28, 2023 · Docket No. RM22-14-000
- Federal Energy Regulatory Commission · FERC Issues Final Rule to Address Interconnection Queue Backlogs (news release) · July 27, 2023
- Federal Energy Regulatory Commission · Order No. 2023-A — Order Addressing Arguments Raised on Rehearing · March 21, 2024 · Docket No. RM22-14-001
Why it matters
Interconnection is the step that most often sets the outer bound on when a project can energize. Under a serial process, a single upstream withdrawal could restudy everything behind it, and a project's date depended heavily on who else was in the queue. A cluster process trades that for predictability with a price attached: the calendar is knowable, but a team has to be genuinely ready at a specific window, with site control and capital committed, to be in it. For an energy-intensive project, that moves the real decision point earlier — often a year or more before anything is built.
Potential project impacts
Schedule
The controlling date becomes the next cluster window, not the date a request is filed. Missing a window can cost most of a cycle, so schedule risk concentrates in a few dates rather than spreading across the process.
Cost
Deposits scale up through the process and are at risk on withdrawal. Network upgrade cost allocation is determined within the cluster, so an assignment depends partly on which other projects stay in.
Site strategy
Site control is required earlier, which pulls land and option costs forward and reduces the ability to keep several candidate sites open at low cost.
Financing
At-risk capital is committed before an interconnection agreement exists, so a financing plan has to fund a development stage with a real, quantifiable loss case.
Delivery
Network upgrade scope arrives with cluster results. Long-lead equipment for those upgrades — transformers in particular — is often the item that determines the energization date, not the project's own build.
Timing and implementation considerations
Rule issued
July 28, 2023FERC issued Order No. 2023 as a final rule amending the pro forma interconnection procedures and agreements.
Order on rehearing
March 21, 2024Order No. 2023-A addressed rehearing requests and modified parts of the original rule.
Compliance filings
Rolling, by transmission providerEach transmission provider filed tariff revisions to implement the rule. Details — cluster window dates, deposit amounts, study timelines — vary by region and are set in that provider's accepted tariff, not in the order itself.
Practical implication for a project
Region-specificThe date that matters is the next cluster application window in the specific region, together with that region's readiness requirements as accepted by FERC. Check the provider's tariff and business practice manuals rather than the order.
Risks and uncertainties
Regional variation
Compliance implementations differ. Two projects in different RTOs can face materially different deposits, milestones, and windows under the same federal rule.
Ongoing proceedings
Interconnection practice continues to be litigated and revised in individual dockets, including how co-located load and large-load additions are treated. Today's practice is not necessarily settled practice.
Cluster composition
Network upgrade cost assignment depends on the behavior of other projects in the same cluster, which a sponsor cannot control and cannot fully forecast at entry.
Equipment lead times
A faster study process does not shorten transformer or breaker delivery. Removing a queue bottleneck can simply relocate the constraint to procurement.
Questions project teams should ask
For your regulatory counsel
- Which transmission provider's accepted tariff governs this point of interconnection, and what does its current version require?
- What are the exact readiness, site-control, and deposit requirements for the next cluster window?
- What withdrawal penalty exposure would we carry at each stage, and under what conditions is a deposit refundable?
For the transmission provider or utility
- When does the next cluster application window open and close, and when are study results expected?
- What is currently in the queue ahead of us at this substation, and what upgrades are already assigned?
- Which network upgrades would be triggered at our requested capacity, and what are their lead times?
For your own team
- Can we hold site control at this location through a full cluster cycle without harming the business case?
- If the study assigns upgrades beyond our threshold, what is the decision rule — resize, relocate, phase, or withdraw?
- Is there a path to serve early load with on-site resources while the interconnection request runs in parallel?
GRIDSTROM perspective
GRIDSTROM perspective · opinion, not reporting
The reform rewards teams that treat interconnection as a design input rather than a permit to collect at the end. In practice, the projects that clear the process well are the ones that sized their request against what the substation can actually support, secured site control before the window rather than during it, and had a phased supply strategy that did not depend on a single study outcome. The rule did not create capacity — it created a calendar. The advantage now sits with whoever is ready on the day the window opens, and with whoever designed a load that the system can accept without triggering the upgrades that set the longest lead times.
This series is published for general information. It is not legal advice, regulatory advice, or tax advice, and it does not create any professional relationship. Rules change, apply differently by jurisdiction, and turn on facts specific to each project. Consult qualified legal, regulatory, and tax counsel before acting.
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