As interconnection queues will lengthen timelines for power plants, substations and transmission upgrades, private equity firm Littlejohn & Co. is investing in GDS Associates Inc., a consulting firm whose planning and regulatory work often determines when these projects move to design and construction.
The partnership, announced March 5, brings together the Greenwich, Conn.-based investment firm with the Marietta, Ga.-based advisory firm as utilities face growing demand for electricity and increasing pressure to move projects through the interconnection process.
The transaction has closed, according to a company spokesman, who declined to disclose the ownership structure or the size of the investment.
Littlejohn said the partnership will support the expansion of GDS capabilities and the pursuit of acquisitions to build a broader platform spanning “consulting, planning, engineering and field services.”
GDS employs around 200 professionals and advises electric cooperatives, municipal companies and investor-owned companies in electricity supply planning, transmission and interconnection studies, load forecasting and regulatory strategy.
Interconnection queues will lengthen timelines
The investment comes as interconnection backlogs continue to build as generation, transmission and substation projects reach construction.
Lawrence Berkeley National Laboratory reported that by the end of 2024, nearly 2,300 gigawatts of energy generation and storage capacity were actively seeking connection to the US grid.
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Berkeley Lab describes “interconnection queues” as lists of proposed power plants that must undergo impact studies to determine what transmission equipment or upgrades may be needed before the projects can be connected and allocate the costs of those upgrades.
In its Queued Up 2025 edition, Berkeley Lab reported about 10,300 projects seeking interconnection, representing approximately 1,400 GW of generation and 890 GW of storage capacity.
The report also found that 408 GW of capacity already has a draft or executed interconnection agreement, but has not yet reached commercial operation.
For regions with available data, Berkeley Lab said the average time from interconnection application to commercial operation has doubled, from less than two years for projects built in 2000-2007 to more than four years for those built in 2018-2024.
For contractors and designers, these timelines typically determine when substation expansions, transmission upgrades, and related protection and control work reach the bid design stage.
Federal regulators have linked the interconnection reforms to the backlog that emerged earlier in the decade.
In an explanation of its regulations, the Federal Energy Regulatory Commission stated that, by the end of 2022, there were more than 10,000 active interconnection applications nationwide, representing more than 2,000 GW of potential generation and storage capacity, and that 68% of the 2,179 interconnection studies completed by the end of the year.
FERC’s rule overhaul requires transmission providers to evaluate projects in “cluster studies,” adds penalties for missing study deadlines, and strengthens financial preparedness and site control requirements aimed at reducing speculative projects in queues.
An example of how grid operators are responding to increased demand comes from PJM Interconnection, which said on March 2 that it submitted proposals to FERC aimed at addressing a supply-demand imbalance that it said was “driven in large part by data center growth.”
Among the proposals is an accelerated interconnection route for certain generation projects. PJM said it would select no more than 10 projects per year for the next two years and expects the study process to take about 10 months. Developers would also be responsible for 100% of the network upgrade costs required to connect.
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Expansion of design and field services
Michael Kaplan, Managing Director of Littlejohn & Co. (left) and David Brian, President of GDS Associates. The companies announced a partnership with the goal of expanding consulting, planning and engineering services for electric utilities.
Images courtesy of Littlejohn & Co. and GDS
For GDS, the investment aims to expand both capacity and services.
“We need more bandwidth in many areas. We need more capacity in many areas,” said David Brian, president of GDS Associates. “We have certain parts of our company that are stretched pretty thin right now, and this partnership will help us with some of the hiring that will be needed to meet the existing demand.”
Brian said the firm also intends to expand its technical offering.
“We have some services that we don’t offer to customers right now that we’d like to be able to offer to customers, and we don’t have them in-house … things like substation design, transmission design,” he said, adding that the partnership will allow GDS to “pursue, probably some acquisitions on that side, to bring those service lines in-house and be able to offer those customers as well.”
A company spokesman said the “field services” in the ad refer to field design, line staking and inspection work.
Michael Kaplan, CEO of Littlejohn, said the company’s investment thesis was based on long-term growth drivers in the power sector.
“We evaluated all of these drivers … and frankly, we wanted to have the broadest exposure to make sure we were behind long-lasting, secular trends and not one-off trends subject to cyclicality,” Kaplan said.
Kaplan described Littlejohn’s role as joining GDS’s existing partnership structure.
“GDS is a partnership … and we’ve become equity partners, so we’ve joined the table as equity partners with the other GDS partners,” he said. “We are joining the board … and will collectively bring in some independent directors.”
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A spokesperson for the company confirmed that Littlejohn will have representation on the board alongside GDS leadership and independent directors.
The companies said the near-term focus will be on expanding capabilities and pursuing acquisitions where appropriate.
“What’s certain is that GDS will hire more good people,” Kaplan said, adding that acquisitions remain “a bit of an opportunistic endeavor.”
GDS has expanded through acquisitions before. In 2020, the company acquired EES Consulting Inc., a firm based in Kirkland, Wash., which it said helped expand its national presence and service offerings.
Separately, the American Public Power Association’s supplier directory describes GDS as a multi-service engineering and consulting firm that provides electric, natural gas and water services, including transmission planning, NERC compliance and distribution system planning.
Littlejohn said it manages approximately $9 billion in regulatory assets under management. AEC Advisors and Environmental Financial Consulting Group acted as financial advisors to Littlejohn, while Morrissey Goodale served as exclusive financial advisor to GDS.
