Why Texas Builds, And Everyone Else Waits

Contributed by Sabah Bayatli | President of OCI Energy
Edited by Paul Gerke

America’s electricity system can seem enormously complex. About 3,000 utilities exist, spanning small and large electric cooperatives, public utilities, and investor-owned companies operating across both regulated and deregulated markets. Additionally, there are seven organized wholesale electricity markets, which help supply power to about two-thirds of the country’s consumers.

As a developer, owner, and operator of commercial and utility-scale solar and battery energy storage projects, OCI Energy sees the American electricity landscape in far simpler terms. There is the ERCOT standard – and then there is everybody else.

That isn’t to say ERCOT’s approach doesn’t have its trade-offs, including increased exposure to congestion and curtailment in some areas of the grid. However, its framework demonstrates that faster project development is possible when interconnection processes prioritize timely deployment alongside reliability considerations.

At the beginning of 2025, ERCOT had about 8.6 gigawatts (GW) of operational storage. By early 2026, that number spiked to around 14 GW, an increase of over 60% and enough to serve about 15-16 percent of ERCOT’s 85–91 GW of peak demand. By contrast, PJM, the largest wholesale market in the U.S., has less than one GW of operational storage, an amount able to meet far less than one percent of its 150-GW-plus peak system load.

A similar gap persists across MISO, SPP, and NYISO, where each has far less energy storage as a percentage of peak load compared to ERCOT. Though somewhat less stark, the same fundamental reality holds for solar: ERCOT gets solar and storage projects built much faster than other markets, positioning Texas to benefit from load growth more than other states.

The Interconnection Gap

Why the gap? OCI Energy develops projects in both deregulated and regulated markets across the country and sees firsthand why Texas moves fast while others stall out.

The main reason: differing interconnection rules. According to Lawrence Berkeley National Laboratory (LBNL), the median time from a project’s initial interconnection request to commercial operation is five-plus years. In ERCOT, however, the timeline is substantially faster, with projects making it through interconnection studies in as little as one year and reaching commercial operation in as little as three. 

Why FERC Order 2023 has yet to deliver faster interconnection

PJM, CAISO, MISO, and other wholesale markets move slowly because they must a cluster process mandated by FERC’s Order 2023. To be clear, the aim of this order was laudable: replace the existing first-come, first-served process with a cluster study approach to clear the interconnection queue.

However, the order has done little to clear the backlog of projects and accelerate interconnection. According to LBNL, the interconnection queue in all the wholesale markets (except ERCOT, which is not subject to FERC regulation) remains enormous, with over 2,000 GW of generation and storage projects awaiting connection.

A cluster of flaws

The cluster interconnection process has many flaws. Rather than studying a project when an application is submitted, ISOs and RTOs wait for an arbitrary deadline to pass before studying an entire cluster of applicants simultaneously.

Even worse, ISOs and RTOs are compelled to assume that every project in a cluster will come online. Not only does this defy the practical reality of project development—LBNL reports that most projects in the interconnection queue are withdrawn before they are built—the assumption dramatically increases the costs of the system upgrades individual projects must bear.

The approach is akin to sizing a road based on the assumption that multiple, different-sized housing developments proposed adjacent to a road will all come to fruition. Before the first nail is pounded, that road (a stand-in for the transmission grid) will need an upgrade that assumes every house will be built and occupied. Developers don’t need a guarantee against inevitable congestion. They need predictable costs and timelines to secure financing, neither of which the cluster process delivers.

The restudy spiral

The cluster study approach can also make projects financially unviable and lead to dropouts by concluding that massive grid upgrades will be needed to interconnect. The result: a new cluster study is necessary because the number of projects has shrunk. The need to do another study delays progress on projects in subsequent clusters, whose studies can’t be completed until those initiated before them are done.

Applicants must also pay a deposit based on the RTO’s initial cost estimate before studies even begin. That estimate can change during subsequent re-studies and comes long before a developer has secured site control, permits, or offtake agreements. This adds significant financial risk at a project’s earliest, most uncertain stage.

What ERCOT gets right

ERCOT’s interconnection process differs from other ISOs and RTOs in ways that demonstrably speed their connection to the grid. Instead of studying projects in clusters, ERCOT examines each individually upon application. In our experience, that means studies are completed in a year or less and aren’t dependent on the impact of other projects.

Instead of requiring an upfront deposit, ERCOT studies the project first and then determines the deposit amount. Most consequentially, ERCOT has a bias toward project construction, meaning projects get a green light for interconnection with the understanding that ERCOT can curtail and manage any congestion once the project is operating. This approach has downsides, particularly for lenders and investors wary of curtailment’s revenue impact. But it gets projects built.

Learn more about OCI Energy on the Factor This podcast:

Solar, storage, and staying ahead: OCI Energy’s growth story

A Case for FERC Order 2026

FERC-regulated ISOs and RTOs should embrace a set of interconnection reforms based on what is working so well in ERCOT: let’s call it FERC Order 2026. Technical fixes matter less than a shift of priorities away from trying to fully solve grid congestion before a single project is built.

The hypothetical FERC Order 2026 accepts that some level of congestion and curtailment is inevitable. It can’t be engineered away in advance. Instead, the answer is to prioritize case-by-case interconnection that gets projects built, accept and work to manage congestion as effectively as possible, and reap the benefits of connecting projects when they’re needed most. With demand for energy far outpacing supply, the pace of interconnection reform should match the urgency of the moment.

Interconnection is clearly a problem for developers. But it will also determine whether America can build the clean energy capacity it needs to meet skyrocketing demand. If developers can build projects in years rather than decades, consumers, utilities, and grid operators all stand to benefit. The lesson from Texas is not that congestion can be eliminated. It’s that waiting for perfection may be the biggest obstacle to progress.

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About the Author

Sabah Bayatli has served as the president of OCI Energy since 2023. With over 15 years in the energy industry, he has played a key role in expanding the company’s footprint in utility-scale solar and battery energy storage systems, advancing a multi-gigawatt pipeline across major U.S. markets.

Sabah joined OCI Energy in 2013 after roles in the oil and gas sector across Eastern Europe, the Middle East, and North Africa. He holds a master’s in engineering from the University of Texas at San Antonio as well as bachelor’s and master’s degrees from Dokuz Eylul University in Turkey. He is also an alumnus of Harvard Business School’s Executive Leadership Program.

Recognized in the San Antonio Business Journal’s 2023 “40 Under 40,” Sabah resides in San Antonio with his wife and two daughters.