The Interconnection Queue: A Battle We Must Help Our Utilities win.

by: Lorenzo Slay III

As the interconnection queue backlog continues to grow, utilities are facing an unexpected consequence: key power consumers are beginning to look for alternatives to traditional grid access. Data centers, EV charging hubs, large industrial facilities, and other power-intensive operations can’t afford the delays associated with waiting years for an interconnection. As a result, the backlog is not only stalling renewable projects and the international effort to decarbonize but is also driving a shift that could depreciate the traditional centralized power model and utilities' roles as champions of energy provision.

The Risk to Utilities’ Position as Centralized Power Providers For decades, utilities have enjoyed a stable position as the primary source of power for most consumers. However, the current interconnection queue delays—four years in some regions—are jeopardizing this long-held role. With pressing operational timelines, corporate decarbonization goals, and regional growth plans, companies are unwilling to sit idle in the queue or wait years to secure power from renewable sources. Faced with these delays, they’re exploring alternatives that reduce dependency on traditional utility interconnections, and these solutions are quickly becoming viable.

How Major Power Consumers Are Responding Key sectors are already moving away from utility-centric power sources:

• Data Centers: Traditionally heavy utility customers, data centers are turning to on-site solar, wind, battery storage, and even small modular reactors (SMRs) to ensure consistent and timely power supply. Hyperscale facilities, especially, are exploring independent power solutions to meet demand without waiting for traditional grid access.
• EV Charging Infrastructure: As EV adoption surges, charging stations need to be deployed quickly and reliably. Fleet operators and public infrastructure providers are considering microgrids and off-grid solar and battery solutions to avoid interconnection delays.
• Industrial Facilities: Large manufacturers are increasingly investing in their own energy sources, such as combined heat and power (CHP) systems, to ensure production continuity and align with sustainability goals.

And it’s not just commercial customers who are evaluating their options; increasingly, well-resourced homeowners are investing in energy independence—a trend accelerating due to climate-induced resilience concerns. These moves mark a potential shift from utilities as primary power providers to utilities as optional providers—a transformation with far-reaching consequences.

Why Utilities Can’t Fail to Rise to the Occasion While utilities are beginning to recognize that the interconnection backlog is more than an inconvenience—it’s a direct threat to their market position—it’s time for the rest of us to consider the threat to equitable access.

When large power consumers start to turn away from utilities due to interconnection delays, it’s not just the utilities that are affected—it’s everyone who depends on a fair and balanced energy system:

• Reduced Grid Investment: As major consumers opt out of the grid, utilities lose a key source of revenue that supports grid upgrades, affecting service reliability for all.
• Rising Costs for Smaller Consumers: As utilities lose large customers, the costs of infrastructure modernization shift to smaller users.
• Reduced Access for Underserved Areas: Utilities often prioritize equitable access, bringing power to underserved areas. Additionally, heavy industrials tend to co-locate with sparsely populated areas, such as rural or lower-income communities. Without sufficient demand and revenue, this priority for areas that might otherwise be overlooked may be compromised.

The implications of an ecosystem where accessible, reliable, clean energy is procured privately by large corporations and wealthy individuals, while general access is managed by a resource-constrained regulated monopoly, won’t be explored here. However, it underscores the critical need for utilities to succeed in this energy transition.

An Opportunity for Equitable Access Fortunately for the power industry, there is real attention, recognized value, and therefore funding available to address this issue. Utilities are in a position to resolve the interconnection queue crisis in a way that not only meets the needs of large consumers but also strengthens their commitment to equitable access for our communities. Innovative utilities and transmission operators are partnering with technology companies, corporates, and startups alike to retool and scale their ability to provide safe, clean, reliable power. When people ask why my team at Transcend is so invested in helping utilities, the answer is simple—supporting utilities is supporting our communities. For Transcend, solving the interconnection backlog isn’t just about efficiency; it’s about safeguarding equitable access to power.