Solmar Insights
Federal grid operators may soon be required to implement a streamlined ‘connect and manage’ interconnection process, mirroring Texas’s model that has enabled rapid integration of new generating capacity. US Senator Martin Heinrich (D-NM) has introduced legislation mandating that all federally regulated RTOs and ISOs offer this service, prioritizing projects that opt in for the new model over those in traditional interconnection queues.
Key figures
Over 100 GW of ERCOT interconnection agreements from 2020 to 2024
Legislation sets new Federal Power Act requirements for RTOs and ISOs
BASED service applies to transmission-connected generation and storage
Legislation targets interconnection bottlenecks
The bill introduced by Senator Heinrich aims to address chronic delays in interconnection by offering a model known as “connect and manage,” which has seen considerable success in Texas’s ERCOT-managed power region. Under the proposal, all US RTOs and ISOs would be required to implement a similar option within 12 to 18 months of enactment. This approach is codified as the “Basic Access Service for Energy-Only Delivery” (BASED). The intention is to accelerate the integration of power generation and energy storage projects into the grid by offering a path that relies more on real-time operational management rather than protracted network upgrades before projects can connect.
ERCOT’s experience with connect and manage has been notable, executing over 100 GW worth of interconnection agreements from 2020 through 2024, far outpacing other US grid regions in new resource integration. This momentum is cited as a motivating factor for the proposed legislation, with policymakers seeking to replicate ERCOT’s scalable results.
By prioritizing projects that request BASED service within existing interconnection queues, the bill seeks to channel new development toward this expedited process. This could lead to a reordering of grid connection priorities across much of the US, affecting the timeline and competitive landscape for solar, wind, storage, and hybrid generation developers.
Market participants should note that the bill specifically targets transmission-connected facilities, potentially reshaping the economics and feasibility of large-scale renewables, merchant storage, and hybrid delivery resources seeking ISO market access.
Mechanics of ‘connect and manage’
The BASED interconnection service would require grid operators to conduct a defined set of studies for each project request, focusing on thermal and voltage steady-state analysis, short-circuit studies, stability analysis, and facilities studies. These evaluations are targeted; they only address whether new or upgraded transmission equipment is truly needed to ensure reliability at the point of interconnection, rather than expanding upgrade requirements far beyond that node.
Critically, these studies would reflect the specific operating characteristics, limits, and any curtailment agreements or modifications proposed by the interconnection customer. This means facilities could connect more quickly, with the understanding that they may be subject to operational limits or curtailment as the system operator manages real-time grid conditions.
If studies identify constraints, the model assumes operational measures, such as redispatch, curtailment, operating limits, or remedial action schemes, will be prioritized for managing congestion and reliability compliance over traditional capital upgrades. Only in cases where these operational tools are insufficient would new transmission facilities be mandated.
The ability for RTOs or ISOs to condition BASED service on the interconnection customer’s willingness to accept curtailment or specific modifications ensures flexibility, but may introduce new long-term risk factors for projects relying on stable capacity delivery.
ERCOT’s results as a model
ERCOT’s deployment of the connect and manage approach is a major focal point for the bill’s proponents. Between 2020 and 2024, according to a report from Berkeley Lab, Texas’s grid operator completed over 100 GW in executed interconnection agreements. This far exceeds the throughput realized by other RTOs and ISOs, where extensive study processes, cumulative upgrade requirements, and protracted negotiations have contributed to lengthy project queues and years-long approval timelines.
The Berkeley Lab report specifically attributes ERCOT’s performance in part to this more flexible, operationally focused interconnection model. The legislative summary positions this as strong justification for scaling connect and manage nationwide, amid growing demand for renewable integration and battery storage assets.
By codifying this approach in federal statute, the bill’s backers argue that nationwide adoption could drive substantial new capacity online more quickly, supporting renewable portfolio standards, reliability, and resource adequacy needs as the US transitions its energy mix. How this plays out in RTOs with different planning philosophies and resource mixes will be a key development to watch for institutional market participants.
Regulatory implications for RTOs and ISOs
The bill would amend the Federal Power Act with explicit language, declaring it “unjust and unreasonable” for any RTO or ISO not to offer BASED interconnection service. This puts direct compliance pressure on all federally regulated grid regions except ERCOT, which already implements a functionally similar model.
RTOs and ISOs would have 12 to 18 months after the bill’s enactment to design and operationalize a BASED option. For these entities, the policy will require architecture changes to queue management, system operations, and curtailment protocols, as well as potential revamps of how projects self-elect into BASED service versus existing traditional study tracks.
With BASED projects receiving queue priority, there is potential for significant reshuffling of existing interconnection backlogs. Developers will need to closely analyze whether the tradeoff between speedier grid access and higher curtailment or operating risk aligns with their investment models and offtake agreements.
This represents a substantial regulatory departure from current practices, where all interconnection customers typically face similar processes and queue positions regardless of risk tolerance or delivery model chosen.
Impacts on project development strategy
If passed into law, the BASED option could fundamentally reshape project siting, financing, and market participation decisions. Developers and asset owners would need to decide whether to pursue faster connection at the potential cost of increased operational risk, or continue waiting in traditional interconnection queues in hopes of obtaining firmer, less curtailed delivery rights through additional network upgrades.
Storage developers, hybrid projects, and merchant generation portfolios may be particularly affected by the BASED model. Projects designed to absorb higher curtailment or optimize dispatch strategies for market participation could extract greater value from earlier grid access, even if energy-only delivery is the primary product.
Institutional investors, infrastructure funds, and energy buyers will need to weight queue position, risk of constraints, and future flexibility of their portfolios under the new regime. The option to propose modifications or accept curtailment as a condition of service adds complexity to offtake contracts, revenue forecasts, and long-term value assessment.
As regions outside Texas adapt to BASED, market participants will watch closely for how ISOs allocate operational risk, set compensation for curtailment, and manage the reliability safety net across increasingly complex regional grids.
What this means for buyers
For institutional buyers and developers, this bill could offer faster market entry for new generation, storage, and hybrid assets across RTO regions, but with increased exposure to curtailment and operational uncertainty. Asset deployment timelines, queue strategies, and financing terms may need to adapt to BASED service mechanics. Early movers willing to accept flexible operation may be able to secure grid positions ahead of more risk-averse competitors. Buyers should closely monitor how individual RTOs and ISOs implement the BASED option and consider scenario modeling around operational curtailment in future procurement and contracting strategies.
