DC Circuit Upholds FERC Order 2023, Keeping $2,500-a-Day Late Fees for Interconnection Studies
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Marin Holt
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- 8 minutes read
- Decided: July 31, 2026
- Petitions Denied: 21 consolidated dockets
- Queue Backlog: 2,600 GW
- Peak Late Fee: $2,500 per business day
- Historic Withdrawal Rate: 70% of requests
The DC Circuit Court of Appeals has upheld FERC Order 2023, the rule that rewrote how generators join the US grid. A three-judge panel decided the case on July 31, 2026. It denied every petition before it. The lead case, Advanced Energy United v. FERC, No. 23-1282, consolidated 21 separate dockets. Transmission providers, grid operators and clean-energy trade groups all filed against some part of the rule. Judges Millett, Walker and Childs ruled per curiam, ten months after argument on September 26, 2025.
The numbers behind the rule explain why FERC acted. At the end of 2023, roughly 2,600 GW of proposed generation and storage sat in interconnection queues. Solar, wind and storage made up about 95% of it. That queue held more than twice the installed generation capacity of the entire country, which stood near 1,200 GW. Most of it was never going to get built. FERC found that developers eventually withdrew more than 70% of the requests filed between 2000 and 2017.
What the Court Upheld
Order 2023 scrapped the serial first-come, first-served queue that Order 2003 built. In its place, transmission providers study projects in clusters inside defined windows. Customers post deposits scaled to project size and stage. Withdrawal fines rise on a tiered schedule as a project advances. Firm study deadlines replaced the old reasonable-efforts standard, which had let providers miss targets without consequence. Automatic late fees give those deadlines force.
The fee schedule is where the rule bites. A delayed cluster study costs the transmission provider $1,000 per business day, a restudy or affected-system study $2,000. Delayed facilities studies, the last stage before an agreement, run $2,500 per business day. Those figures look punishing until you reach the ceiling FERC attached to them. Total fees on any single study stop at 100% of the initial study deposit. Providers keep the right to contest them at the Commission.
Both flanks lost, which is the more telling result. Transmission providers and system operators argued that FERC had exceeded its Federal Power Act authority. They called the late fees strict-liability penalties and raised due-process and APA claims. Clean-energy developers attacked the same rule from the opposite side. They said a safe harbor arbitrarily shielded providers from penalties they had earned. The court rejected both readings and denied the Clean Energy Petitioners petition in full.
Why It Matters
Three years of legal doubt over Order 2023 ended on Friday. Compliance filings and cluster windows already in motion now rest on settled law. Nobody has to hedge against a vacated rule. Developers sitting in a cluster study have a firm deadline with a priced remedy behind it. The remedy has a ceiling most of them have not priced. A late facilities study earns $2,500 per business day. That stops once the running total reaches the deposit the customer paid.
On a modest deposit, that meter stops long before a slow study finishes. Treat the late fee as a schedule-risk offset, not as a guarantee that anyone will hurry.
None of this shortens a queue by itself. FERC made a bet that deposits and fines would push unready projects out and move the serious ones faster. The court held only that the agency had authority to make that bet and explained itself well enough. Whether the 2,600 GW backlog actually falls is a question for the compliance data, and that answer is years away.
Critical Perspective
The 70% withdrawal rate carries most of the justification, and it describes a different grid. FERC drew that figure from requests filed between 2000 and 2017. The queue it now governs is roughly 95% solar, wind and storage. Whether those developers respond to deposits the way the earlier cohort did is an assumption, not a finding.
Both flanks losing reads like proof of a balanced rule. It is not quite that. The court reviewed whether FERC stayed inside its Federal Power Act authority and explained its reasoning. That standard is deferential by design. A rule can survive it and still be badly calibrated, and the opinion says nothing about whether the deposits sit at the right level.
Enforcement is the open question the decision does not reach. Late fees are automatic, but providers keep the right to contest them at the Commission. Every contested fee becomes a filing at the same agency whose backlog the rule exists to relieve. FERC publishes no running tally of fees assessed or paid. Without that number, nobody outside the transmission providers can tell whether the deadlines bind or are merely priced.
