On Friday, September 12, 2025, the New York State Public Service Commission (Commission) published a Straw Proposal for Interconnection Queue Management in Case 24-E-0621. The proposal is intended to streamline cooperation between the State’s public utilities and Distributed Energy Resource (DER) developers with pending interconnection requests. The goal is to create opportunities to facilitate the work necessary for projects to be placed in-service or otherwise meet eligibility deadlines for receiving federal tax credits. The proposal is a response to the August Internal Revenue Service (IRS) guidelines on renewable energy project eligibility for certain federal tax credits pursuant to §§ 70512 and 70513 of Public Law 119-21, 139 Stat. 72 (July 4, 2025) and Executive Order 14315.
In making the proposal, the Commission is recognizing that each project connecting to the transmission system is affected by the multitude of other projects that are also seeking interconnection. The new rules, therefore, seek to enable the utilities to begin work on a wide range of system upgrades and other work in a concerted effort to advance as many projects as possible across the finish line. To do this, the proposal suggests that DER projects be placed into one of three categories based on their progress in the interconnection queue and the scope of identified system upgrades required to achieve the requested interconnection. Once categorized, the utilities and the DER developers will be authorized to accelerate work authorizations to meet in-service dates, evaluate the potential for successful interconnection in light of needed or issued permits, and, when appropriate, allow the utilities to modify work plans as needed so that participating projects can meet the relevant IRS in service deadlines. The utilities will be required to act transparently and publish their work plans and any revisions.
To take advantage of these new rules, DER developers would be required to authorize the utilities to spend deposited funds or draw on standby letters of credit as needed to meet the modified work plans. Developers who cannot, or do not meet certain threshold dates, would not be entitled to refunds for either Qualifying Upgrade payments or work performed in accordance with a published workplan, and the utility would be authorized to complete the upgrade subject to the cost limits provided in the SIR. Notably, the Commission has suggested that when a utility cannot complete an identified upgrade on schedule, the utility shall consider alternative approaches to meeting the in-service deadline if requested by the participating projects.
Hodgson Russ Take
The Commission should be commended for its quick action and concerted effort to remove interconnection barriers and streamline the work-flow necessary to interconnect viable DER projects in a timely manner. The Commission’s Straw Proposal is a practical and needed effort to speed up the pace of DER interconnection, which is often slowed by delayed construction and allocation of limited resources. By creating a state-wide policy to manage work plans, the Commission would enable utilities to respond more quickly, and more wholistically, to system-wide issues. The proposal itself appears to echo the “first-ready first-served” principles embodied in the interconnection procedures for larger projects by focusing on how the system upgrades and assumptions related to earlier projects in the queue impact later queued projects. If the proposal is implemented, DER developers will need to be aware of increased costs that may come with faster construction, as well as increased risk to upfront deposits. Also, while these new rules may provide exceptional benefits to some projects, it remains unclear whether this new focus will draw resources away from others and cause unexpected delays.
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