Interconnection

High Level

This week’s interconnection developments point in the same direction: move scarce grid access to projects that clearly serve customers, and remove equipment bottlenecks that slow those hookups. California’s new executive order asks regulators to prioritize interconnection for generation and storage due within three years, industry voices urged replacing first‑in‑time queue priority with customer and system benefit tests, and Hitachi Energy announced a $1 billion U.S. manufacturing program anchored by a $457 million Virginia facility for large power transformers that are essential to connect new load and resources. Together, these actions align policy and supply chain toward faster, higher‑value interconnections.

Full View

Hitachi Energy launches $1 billion U.S. grid manufacturing program, including a $457 million Virginia transformer plant
• What happened: Hitachi Energy announced a $1 billion plan to expand U.S. production of critical grid equipment, including a new large power transformer factory alongside its South Boston, Virginia campus. The Virginia project totals $457 million and is described as creating the largest U.S. manufacturing site for large power transformers, with operations expected in 2028.
• Who did it: Hitachi Energy; Commonwealth of Virginia (Office of the Governor; Virginia Economic Development Partnership).
• Why they did it: To relieve multi‑year transformer bottlenecks and serve accelerating U.S. demand from data centers, industry, and grid expansion.
• Stakeholder views: “Power transformers are a linchpin technology for a robust and reliable electric grid and winning the AI race,” said Andreas Schierenbeck, CEO of Hitachi Energy.
• What happens next: Construction is slated to start in 2025, with ramp‑up toward 2028 operations. Virginia incentives include a proposed $29.4 million MEI performance grant, and the state is supporting 96 units of workforce housing tied to the expansion.
[Hitachi Energy, “Hitachi announces historic $1 billion USD manufacturing investment to power America’s energy future through production of critical grid infrastructure,” Sept. 4, 2025]
[Office of the Governor of Virginia, “Governor Glenn Youngkin Announces Landmark Investment by Hitachi Energy,” Sept. 4, 2025]
[Utility Dive, “Hitachi unveils $1B grid manufacturing investment, including Virginia transformer factory,” Sept. 4, 2025]

Regulators and market participants press for customer‑oriented interconnection to replace first‑in‑time queue priority
• What happened: In an Energy Bar Association paper, Colorado PUC Chair Eric Blank and NRG’s Travis Kavulla argue that scarce interconnection capacity should be allocated based on customer and system value rather than application timestamp. They highlight competitive procurement winners and LSE‑designated projects as candidates for priority, citing Colorado’s resource solicitations and CAISO’s LSE “commercial interest” scoring.
• Who did it: Eric Blank (Chair, Colorado PUC) and Travis Kavulla (VP Regulatory Affairs, NRG Energy; former NARUC president), writing in EBA Brief.
• Why they did it: The authors contend that under conditions of scarcity, “The grid’s ‘Gold Rush’ era has ended,” and that first‑in‑time policy misallocates access and creates rent for early filers.
• Stakeholder views: “Open access should remain a core principle of interconnection policy in the United States,” the paper states, while urging reforms that tie priority to verified customer demand through transparent processes.
• What happens next: They call on FERC, RTOs, and states to replace one‑off “jump‑the‑line” exceptions with durable standards that elevate competitively selected or LSE‑designated projects, and to consider auction or open‑season mechanisms in restructured markets.
[Energy Bar Association (EBA Brief), “The End of the Grid’s Gold Rush Era: Toward Customer‑Oriented Approaches to Generator Interconnection,” Fall 2025]
[Utility Dive, “It’s time for customer‑oriented approaches to generator interconnection,” Sept. 3, 2025]

CCSA backs Newsom order to fast‑track interconnection, presses CPUC to scale CREP by Jan. 1, 2026
• What happened: The Coalition for Community Solar Access praised Governor Gavin Newsom’s Executive Order N‑33‑25 and urged the California Public Utilities Commission to accelerate the Community Renewable Energy Program. The order requests CPUC to identify generation and storage projects expected online within three years and ask jurisdictional utilities to prioritize actions to enable them to interconnect.
• Who did it: Coalition for Community Solar Access; Governor Gavin Newsom; California Public Utilities Commission.
• Why they did it: CCSA cites expiring federal tax credit deadlines and the halt of Solar for All funding as drivers to finalize a scalable, market‑driven state program that can deliver bill savings and reliability.
• Stakeholder views: “Governor Newsom has made clear that California cannot afford to move slowly while federal incentives expire and energy demand continues to surge,” said Derek Chernow, CCSA Western Regional Director.
• What happens next: Under the order, CPUC is requested to prioritize interconnection for near‑term projects and report actions to the Governor’s Energy Working Group, which must submit a 90‑day progress report; CCSA urges the Commission to finalize CREP rules by January 1, 2026.
[Coalition for Community Solar Access, “CCSA Applauds Gov. Newsom’s Executive Order, Urges CPUC to Act,” Sept. 3, 2025]
[Office of the Governor of California, “Executive Order N‑33‑25,” Aug. 29, 2025]
[Canary Media, “Trump administration says it’s axing $7B program for low‑income solar,” Aug. 7, 2025]

What’s the So What?

Interconnection reform that prioritizes real customer value and removes physical bottlenecks is the only path to add MWs faster and cheaper; California’s order is the most immediate lever and should be implemented with customer‑led queueing principles.

Our view is straightforward and unapologetically pragmatic: rules and investments that reduce time‑to‑interconnect and total delivered cost per MW are good; “reform” that moves in the opposite direction are bad. On that test, this week’s items are directionally right.

California’s Executive Order is a useful instrument because it tells the CPUC and CAISO to triage the queue toward projects that are close to commercial operation and needed in the next three years. The commission should translate that direction into specific, time‑boxed processes: identify and fast‑track LSE‑contracted projects; require utility action plans for interconnection steps on a 90‑day cadence; and publish transparent dashboards that reveal where utility actions are gating COD. That is what converts an order into megawatts. Governor of California

The EBA Brief provides the missing doctrine. First‑in‑time worked when headroom was abundant. Under scarcity, it manufactures rent and delays. Prioritizing projects tied to load or competitively selected resources, and using auctions for any remaining merchant capacity, aligns rights with value, preserves open access, and clears stale queues. California already has a foothold with CAISO’s LSE points. Colorado shows that competitive, state‑supervised solicitations can pick winners on price and performance rather than timing. Jurisdictions facing fast load growth should borrow these features now. EBA

Hardware matters. Hitachi’s transformer investment is not a silver bullet, since relief lands in 2028, but it is the correct vector. Regulators and utilities should pair this build‑out with near‑term measures: multi‑year transformer procurement frameworks, common specifications that broaden supplier pools, and shared spares programs. Those steps can shave months off energization while domestic capacity ramps. Utility Dive

Bottom line: If agencies implement the customer‑led triage envisioned by the EBA Brief and the California order, and if utilities aggressively manage equipment constraints, we will lower the time and cost per interconnected MW. That is the metric that should govern interconnection policy next week and every week after. Governor of California EBA

Bibliography

Hitachi Energy. “Hitachi announces historic $1 billion USD manufacturing investment to power America’s energy future through production of critical grid infrastructure.” Sept. 4, 2025. [https://www.hitachienergy.com/us/en/news-and-events/press-releases/2025/09/hitachi-announces-historic-1-billion-usd-manufacturing-investment-to-power-america-s-energy-future-through-production-of-critical-grid-infrastructure]
Office of the Governor of Virginia. “Governor Glenn Youngkin Announces Landmark Investment by Hitachi Energy.” Sept. 4, 2025. [https://www.governor.virginia.gov/newsroom/news-releases/2025/september/name-1057941-en.html]
Utility Dive. “Hitachi unveils $1B grid manufacturing investment, including Virginia transformer factory.” Sept. 4, 2025. [https://www.utilitydive.com/news/hitachi-unveils-1b-grid-manufacturing-investment-including-virginia-trans/759219/]
Energy Bar Association. “The End of the Grid’s Gold Rush Era: Toward Customer‑Oriented Approaches to Generator Interconnection.” Fall 2025. [https://www.eba-net.org/wp-content/uploads/2025/08/EBA-Brief-2025-Vol-1.pdf]
Utility Dive. “It’s time for customer‑oriented approaches to generator interconnection.” Sept. 3, 2025. [https://www.utilitydive.com/news/customer-oriented-generator-interconnection-kavulla-blank/758657/]
Coalition for Community Solar Access. “CCSA Applauds Gov. Newsom’s Executive Order, Urges CPUC to Act.” Sept. 3, 2025. [https://communitysolaraccess.org/news/ccsa-applauds-gov-newsoms-executive-order-urges-cpuc-to-act]
Office of the Governor of California. “Executive Order N‑33‑25.” Aug. 29, 2025. [https://www.gov.ca.gov/wp-content/uploads/2025/08/Clean-Energy-EO_8.29.25_FINAL.SIGNED.pdf]
Canary Media. “Trump administration says it’s axing $7B program for low‑income solar.” Aug. 7, 2025. [https://www.canarymedia.com/articles/solar/trump-administration-says-its-axing-7b-program-for-low-income-solar]