Stay in the interconnection queue or withdraw?

Why the decision points matter more now

Most queued capacity never reaches operation. Of the capacity that requested interconnection from 2000 to 2020, 13% had reached commercial operation by the end of 2025 and 75% had withdrawn (Berkeley Lab; see the queue statistics).

FERC Order No. 2023 made staying in the queue progressively more expensive. Interconnection customers post a commercial readiness deposit at the beginning of each study, and that deposit shifts from one based on facility size to increasing percentages of the customer's identified network upgrade costs. Transmission providers must impose a withdrawal penalty when a withdrawal has a material impact on the cost or timing of requests with an equal or lower queue position (FERC).

Order No. 2023-A added two limits: withdrawal penalties cannot exceed the amount collected from the customer, and no penalty applies if the withdrawal has no material impact on any request in the same cluster. It also allowed surety bonds as deposits (FERC).

What changes at each decision point

Each transmission provider sets its own amounts and timing in its tariff. Three examples:

• PJM. Each decision point is 30 calendar days. Readiness Deposit No. 1 is $4,000 per MW, and a request withdrawn before Phase I starts does not forfeit it (Manual 14H). See the PJM interconnection queue page.
• SPP. Financial security steps up at each decision point: $4,000 per MW to enter Phase One; at Decision Point 1, the greater of 10% of a cost factor (less the first security) or $4,000 per MW; at Decision Point 2, 20% of total upgrade costs less the securities already posted (SPP). See the SPP interconnection queue page.
• ISO New England (as proposed in January 2024). For large generators, a first readiness deposit of twice the $250,000 study deposit, then 5% of network upgrade costs at the cluster restudy, 10% at the facilities study, and 20% of network upgrades and interconnection facilities when the agreement is signed, with penalty-free withdrawal if network upgrade costs rise by more than 25% in the cluster restudy report or more than 100% in the facilities study report. ISO New England noted the proposal could change (ISO-NE). See the ISO-NE interconnection queue page.

The pattern is the same everywhere: the later you withdraw, the more is at stake, and the rules for recovering it depend on how much your costs changed and whether leaving affects anyone else.

Treat cost changes as the first signal

In Berkeley Lab's PJM analysis, withdrawn projects carried average interconnection costs of $599/kW, against $84/kW for recently completed projects; network upgrade costs averaged $563/kW for withdrawn projects and $71/kW for complete ones (Berkeley Lab, January 2023). The data show the association, not the reason for any single withdrawal, but they explain why an allocated-cost change is the first thing to examine at a decision point.

What to put in front of management

1. 01

   Cost exposure

   Your allocated network upgrade costs now, what they were at the last decision point, and which upgrades are shared with other requests.

2. 02

   Dependency on others

   Which of your results assume requests that could still withdraw, and what a restudy could move.

3. 03

   Money at risk

   The deposit or security you must post to continue, and what you would forfeit or recover by withdrawing now under the governing tariff.

4. 04

   Schedule

   The next phase's length, prior-cycle and affected-system dependencies, and the date that matters commercially.

5. 05

   Commercial path

   Offtake, service type (energy-only or capacity) and whether the project still clears its investment case at the current cost.

6. 06

   Alternatives

   Another point of interconnection, a smaller request, a later cycle, or a different service type, compared on the same basis.

Keep verified facts, project inputs, assumptions and unknowns separate, as in the interconnection due diligence checklist.

A decision rule

• Continue when the project still clears its investment case at the current allocated cost, the next deposit is justified by that case, and no unresolved unknown could reverse the answer before the following decision point.
• Review when an unknown could reverse the answer and can be resolved inside the decision window. Name the owner and the date.
• Withdraw or restructure when the case fails at the current cost, or when an unknown that could reverse it cannot be resolved before the money is committed. Check the tariff's penalty and refund terms first.

Node history can sharpen the questions. The public-record retrospectives show how earlier requests at specific points of interconnection resolved, without claiming why.