FERC issued an order on May 21 in Docket EL26-39-000 denying a Federal Power Act section 206 complaint brought by Gaston Green Acres Solar, LLC and Bethel NC Hwy 11 Solar, LLC against PJM Interconnection. The complaint, filed January 8, argued that PJM’s Open Access Transmission Tariff is unjust and unreasonable because it does not permit Transition Cycle No. 1 interconnection customers to withdraw their projects without forfeiting Readiness Deposits when the network upgrade cost allocation jumps significantly between the Phase III System Impact Study and the final retool study.
PJM’s answer asked the Commission to deny the complaint on the grounds that it constitutes an untimely collateral attack on prior Commission orders approving the at-risk Readiness Deposit framework. That framework was designed for two specific purposes: discourage late-stage withdrawals from the queue, and prevent the cost-shift that occurs when a withdrawing project’s allocated upgrade costs reallocate to the remaining projects. FERC sided with PJM.
The mechanic that gets affirmed: under PJM’s transition rules, Readiness Deposit No. 1 equals 4,000 dollars per megawatt of project size, and Readiness Deposit No. 2 equals 10 percent of the allocated Phase I network upgrade cost minus Readiness Deposit No. 1. Both deposits stay at risk through the retool. A developer who walks at retool walks away from those deposits, full stop.
Why this matters for the thesis. The PJM queue is the single largest interconnection backlog in the United States, and Transition Cycle No. 1 is the cleanup batch that FERC and PJM jointly designed to clear the legacy queue under Order 2023’s faster-cluster regime. Two structural takeaways:
First, network upgrade cost surprises are real and getting bigger. Phase III to retool deltas have been wide enough across the cycle that two North Carolina solar projects pursued a tariff change rather than absorb the cost. The Commission held the line, which means the deltas continue to be the developer’s risk to underwrite.
Second, the marginal queue project gets cleaner. By holding the deposit framework, FERC reduces the cost-shift to remaining projects when other developers exit, which makes the cycle’s late-stage economics more predictable for the survivors. That is a constructive signal for the developers with conservative cost frames and a negative one for those that priced their offtake on the lower bound of Phase III study estimates.
Watch for two follow-ons inside the next two cycles. Does PJM publish updated retool delta statistics by region, and do other RTOs facing similar disputes (MISO, ERCOT) lean on this denial as precedent when their own readiness deposit frameworks come under section 206 pressure. Solar pipeline economics in the eastern interconnect run through these answers.