Data vintage: Q2 2026 · Sources: PJM Manual 14B & 14C Rev. 68 (Jan 2026) · FERC Order 2023 · PJM IA execution data 2022–2025
PJM Cost Responsibility Framework
1
Direct Assignment (First-Mover)
Costs triggered solely by the first project at a substation are directly assigned. Includes protection upgrades, metering, communication, and generator lead. Typically $2–30M per project.
Manual 14B, Section 3.5.1
2
Allocable Facilities (Shared NUC)
Large network upgrades triggered by multiple projects are allocated via PTDF load-flow sensitivity. Projects pay proportional share. $20M–$2B range for major 500/765kV upgrades in constrained zones.
Manual 14B, Section 3.5.2
3
Baseline Cost Responsibility
Per FERC Order 2023, PJM implemented $5M baseline threshold. Developer may withdraw if costs exceed baseline by 25% at Milestone 1 or 2 without forfeiting IFA. Protects early-stage project economics.
FERC Order 2023, Sec. IV.C
4
Interconnection Financial Assurance
Posted before IA execution: $70k/MW (wind), $40k/MW (solar + storage). Drawn if project withdraws after construction milestones begin. Refunded upon commercial operation. Can be posted as letter of credit or cash.
Manual 14C, Section 4.3
5
Network Upgrade Reimbursement
Certain baseline network upgrades are socialized to load ratepayers. Developer may receive partial reimbursement via OATT transmission credits over 20+ years. Complex settlement process — consult IA Exhibit C for project-specific terms.
PJM OATT, Schedule 5
PJM Cost Benchmarks by Technology
| Technology | Avg Direct Assign | Shared NUC (per MW) | IFA Rate | Total Typical Range |
|---|
| Onshore Wind | $8–25M | $60k–$150k/MW | $70k/MW | $15–90M |
| Utility-Scale Solar | $5–20M | $40k–$120k/MW | $40k/MW | $10–60M |
| Solar + BESS | $8–30M | $55k–$140k/MW | $40k/MW (each) | $15–80M |
| Standalone BESS | $3–15M | $30k–$90k/MW | $40k/MW | $8–40M |
| Offshore Wind (NJ) | $30–120M | $150k–$400k/MW | $70k/MW | $80–400M |
| Nuclear (SMR) | $15–50M | $80k–$200k/MW | $70k/MW | $30–120M |
| Gas Peaker / CC | $5–25M | $40k–$100k/MW | $40k/MW | $10–50M |
Surplus Interconnection Service (SIS)
Cost Reduction Tool
What Is SIS?
PJM mechanism allowing a new project to use interconnection capacity freed when a retiring generator leaves the queue. Can dramatically reduce interconnection costs — avoids most system impact study work and shared NUC allocation.
LGIP Section 7.4
Eligibility Criteria
SIS Requirements
New project must be ≤ MW of the retiring project. Must use same Point of Interconnection. SIS request filed 60 days before retiring project's IA termination. Technology change may require additional study.
Manual 14B, Section 7.4.2
Typical Savings
Economic Impact of SIS
SIS avoids 60–90% of typical system impact study costs. Network Upgrade costs may still apply if new technology or additional MW triggers different loadflows. Typical project savings: $5–50M and 12–24 months of study time.
Key Risk
SIS Voiding Risk
If retiring project reinstates its IA (rare but possible), SIS request is voided. Developer loses queue position deposit but not IFA if SIS voiding occurs pre-milestone. Always consult LGIP Section 7 before relying on SIS for project financing.
Interconnection Cost Trends
2018
Baseline Era — ~$85k/MW Average
PJM-wide average all-in interconnection cost across all technologies approximately $85k/MW. Solar and onshore wind projects averaging $40–70k/MW in less congested zones.
2020
Cost Spike Begins — NJ Offshore Wind
First large NJ offshore wind IA studies reveal $200–400k/MW in Network Upgrade costs. Larrabee and Branchburg 500kV substations identified as constrained POIs. Industry-wide cost expectations reset.
2022
Average Rises to ~$130k/MW
500kV upgrade requirements in PPL and AEP zones increasing average. Northern VA data center load growth driving new constraints in DOM zone. PJM pauses serial IA studies during transition.
2023
RTEP $48B — Cost Allocation Complexity Increases
PJM 2023 RTEP approval triggers new SUF/CITC cost allocation for ~150 projects near affected transmission lines. NUC estimates for projects in PPL, ComEd, and DOM zones revised upward.
2024–2025
Cluster Study Era — Costs TBD
First cluster study results expected 2025. Industry anticipates shared NUC cost reductions from better clustering and co-optimization vs. serial study over-allocation. IFA requirements unchanged at $40–70k/MW.
2026
NJ OSW IA Executions — Cost Precedent
First NJ offshore wind cluster projects expected to reach IA execution under new rules. Will set industry-wide cost precedent for large-scale OSW in PJM. Estimated total IA costs: $4–8B aggregate for 7 GW of NJ OSW.