Order No. 2023 compliance filings set commercial readiness deposit levels

The commercial readiness requirements introduced through Order No. 2023 are intended to remove speculative positions from interconnection queues. They do so by requiring demonstrations, typically site control and escalating deposits, that cost money to maintain.

For a well-capitalised developer this is a filter that works in its favour. For a smaller developer it is a barrier to entry, and the policy trade-off was acknowledged in the rulemaking record.

The financial characterisation matters for underwriting. Deposits held through a multi-year study process are not a soft cost. They are capital at risk, refundable in some circumstances and forfeit in others, with a return profile determined by the withdrawal penalty schedule of the relevant provider.

Because those schedules differ by region, the same project has a different capital profile in PJM than in MISO, independent of its physical merits.

What to watch: whether deposit levels prove high enough to change queue composition, or merely high enough to change who can afford to be in it.