The Vertically Integrated Utility’s Balancing Act: Grid Planning in an Uncertain Future

Today, vertically integrated utilities sit at the crossroads of competing grid demands: rising interconnection pressure, aging infrastructure, DER growth, and decarbonization mandates—all managed under one roof. While many parts of the country have unbundled generation, transmission, and distribution functions, VIUs remain the dominant structure in the Southeast, Mountain West, and parts of the Midwest. These utilities hold full accountability for grid reliability and planning—but often without the digital infrastructure or coordination tools needed to meet the moment.

As entities that combine generation, transmission, and distribution within a single organization, VIUs face a uniquely complex balancing act. They must integrate interconnection responsibilities alongside their obligations to serve load, manage capital investment, and comply with evolving regulatory expectations.

To prepare for a more dynamic energy landscape, many VIUs are exploring integrated planning strategies aimed at breaking down internal silos and managing uncertainty. These efforts seek to align transmission, distribution, and resource planning functions, ensuring that system upgrades anticipate—not react to—interconnection demand. While still emerging, this integrated approach is increasingly seen as critical for managing DER growth, electrification, and long-lead infrastructure investment—especially in contexts where customer affordability and policy mandates must also be weighed.

As VIUs prepare for a more complex energy future, many are exploring integrated planning strategies to better manage uncertainty. These efforts aim to bring together transmission, distribution, and resource planning functions to ensure system upgrades align with expected interconnection demand. While not yet common practice, this type of integrated approach is gaining traction as a critical enabler for managing DER growth, electrification, and long-lead infrastructure investment—especially for utilities that must balance grid needs with customer affordability and policy compliance.

The Overlooked Coordination Gap

Unlike pure-play Transmission Owners or Load-Serving Entities, VIUs must toggle between multiple roles—planning and operating across generation, transmission, and distribution. But while their responsibilities have grown more complex, their planning systems haven’t kept pace. Most interconnection platforms are built to support a linear intake process, not a multidimensional planning function, leaving VIUs to:

• Manage interconnection intake through legacy portals or spreadsheets while relying on entirely separate tools for distribution planning and transmission modeling with no integrated data flow between them
• Respond to interconnection requests without access to real-time information on substation constraints, upstream grid conditions, or the permitting and development status of nearby projects
• Manually re-enter and reconcile inputs—such as queue position, study milestones, and engineering assumptions—across uncoordinated systems, increasing the risk of error and delay
• Interpret and comply with evolving requirements from RTOs, state regulators, and their own internal resource planners, often without a shared platform for timeline management or conflict resolution

For vertically integrated utilities, the challenge isn’t just the volume of interconnection requests—it’s the disconnect between the teams, systems, and timelines involved in managing them. Transmission planning, distribution engineering, customer interconnection, and capital investment all operate on different tracks, often with different assumptions and tools. When those elements don’t align, it’s easy to miss critical signals—like a substation approaching overload, a permitting delay upstream, or a resource need that’s misrepresented in the queue.

This lack of role-specific infrastructure creates inefficiencies in how VIUs process interconnection requests and coordinate system upgrades. Without aligned tools and workflows, it’s difficult to track how new generation affects local constraints or how overlapping projects may impact load-serving obligations. While EPRI's 2022 research on integrated system planning helped signal this need early on, the coordination challenges it described still persist across the industry. The report notes that utilities are either implementing processes that are not yet mature or are in preliminary discussions to define collaboration across planning domains—highlighting the ongoing gap between intention and implementation (EPRI, 2022, p. vii; link).

What Smarter Support Could Look Like

Imagine a platform where a VIU planner can:

• Toggle between transmission, distribution, and resource views based on task
• Flag constraints, community input, or permitting risks during interconnection intake
• Run load growth scenarios alongside interconnection activity forecasts
• Coordinate across roles—from transmission engineers to capital planners—using a shared source of truth

Hypothetical Use Case: A VIU planner reviewing multiple interconnection requests in a rapidly growing corridor identifies one proposed solar project that would overload a local substation. With access to internal load forecasts, scheduled feeder upgrades, and distribution planning constraints, they proactively flag the issue, redirect the request to a nearby substation, and notify capital planning—saving three months in study cycle time and avoiding a potential $1.2 million redesign.

Smarter tooling allows VIUs to act earlier and with more precision. The result? Shorter study timelines, fewer late-stage redesigns, and capital plans that more accurately reflect system needs.

Why It Matters

When VIUs gain better visibility across their planning and interconnection functions, the impact extends far beyond individual projects or territories. These utilities often serve as the operational bridge between regional transmission networks and local distribution systems—where many of the most pressing interconnection challenges play out.

By embedding intelligence into the interconnection process, VIUs can:

• Prioritize infrastructure upgrades that align with likely project approvals, avoiding costly mismatches
• Incorporate site-specific and substation-level insights that improve the accuracy of regional studies
• Break down silos across engineering, planning, and interconnection teams to streamline decision-making
• Provide clearer signals to developers, regulators, and RTOs on what is feasible and where

This isn’t just about doing the same work faster—it’s about making interconnection a proactive part of system planning. When coordination improves, so does the grid’s capacity to respond to new technologies, policy mandates, and customer needs.

What’s Next

In the final part of the series, we’ll examine the evolving role of regulators and state energy offices. As interconnection becomes a public policy priority, what levers do policymakers have to align planning, permitting, and infrastructure investment?

Want to learn more about how intelligent platforms can support vertically integrated utilities manage interconnection?

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By Tom Coons, VP of Customer Experience, GridUnity

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