PJM Weighs Reforms to Revive Underused Surplus Interconnection Pathway

PJM Interconnection is taking a second attempt at reforming its surplus interconnection service (SIS), which lets new generation or storage connect using excess capacity interconnection rights (CIRs) at existing power facilities. An earlier reform effort completed in early 2025 has produced little movement, according to the report.

Since 2023, PJM has received eight SIS applications and approved two, according to a late November presentation, the most recent status update from the grid operator. PJM does not release information on SIS requests beyond periodic updates to its Interconnection Process Subcommittee, spokesman Jeffrey Shields said.

The problem

According to Grant Glazer of MN8 Energy, PJM's current rules do not provide a workable way for surplus additions to access CIRs tied to an existing generator. A battery added to a solar farm can participate as either a co-located or hybrid resource, but neither model allows clean separation of market participation between the existing and new resources, Glazer said.

Proposed fix

PJM staff this month floated allowing hybrid resources, which participate in the capacity market as a single resource, to participate separately in the energy and ancillary services markets. The idea is outlined in an "issue charge" under review, with any rule changes to be developed through PJM's Market Implementation Committee.

Context and support

The effort follows PJM missing its reserve margin targets in its last two capacity auctions, with shortfalls growing to about 6.8 GW for the 2028/29 delivery year from 6.5 GW for 2027/28. Advanced Energy United supports the changes, with senior director Jon Gordon calling the fixes "relatively easy" given PJM's need for new resources.

Indiana and Virginia passed laws this year directing utilities to study surplus interconnection potential in their states.