FERC's new transmission rules

The Federal Energy Regulatory Commission (FERC) passed two new transmission rules today. One called Order 1920 addresses long-term regional transmission planning and cost allocation. To date, electrical transmission providers have tended to be reactive rather than proactive to grid needs. For example, when a new solar or wind farm project is proposed, they then check to see if the grid can handle it, rather than anticipating the rapid growth in power demand and production that's coming over the next few decades and proactively developing transmission infrastructure to handle it.

The new FERC rule requires transmission providers to plan for their region's electrical transmission needs at least 20 years in the future, and update those plans every five years. Those plans will take into consideration factors like the growing supply of more intermittent clean energy sources and greater grid stress from worsening extreme weather events. And they have to consider implementing alternative technologies that could save ratepayers money: dynamic line ratings, advanced power flow control devices, advanced conductors, and transmission switching.

To figure out who will pay for the needed grid upgrades and avoid drawn-out fights over who will pay for how much, the rule also directs transmission providers to work with states on a formula for allocating costs to customers proportional to the expected benefits from the new lines.

And finally, Order 1920 also tells transmission providers to revise their inter-regional transmission coordination processes. This should help each region comply more smoothly with the BIG WIRES Act's requirements to increase inter-regional transmission capacity, once that bill is passed.

The other called Order 1977 is related to the Department of Energy's (DOE's) recent announcement on National Interest Electric Transmission Corridors. The 2005 Energy Policy Act and the 2021 bipartisan infrastructure bill gave DOE the authority to designate these areas where building new transmission lines would be in the national interest, and for FERC to then have the authority to permit transmission lines in those areas if states are too slow or reject them. This new rule confirms FERC's authority to issue permits, and also requires the transmission project developers to create community and tribal engagement plans.

Order 1977 could have been a bit more aggressive, because it initially allowed FERC to engage in the project permitting process in these national interest corridors at the same time as the state and local permitting process happens, to be ready in case states act too slowly or reject a critical transmission project. During the rule's public comment process, a number of states objected to this and wanted to be sure that FERC would work with them rather than stepping on their toes. FERC ultimately conceded to give the states a year to go through the permitting process before they act. It could extend transmission project timelines by an extra year in some cases, but it also reduces friction between the state and federal agencies, and as a result this rule was able to pass through a 3–0 bipartisan FERC vote.

In the end, these are both helpful new rules that will allow the transmission permitting process to happen faster and more proactively and cost-effectively. As FERC Chair Willie Phillips said, "Combined, these two new rules make the first significant FERC action on transmission policy in more than a decade."

9 Replies

@Dana Nuccitelli
Thank you for explaining what these new rules will do.  Very timely info.  Best, Linda 

@Dana Nuccitelli, there's also a fairly detailed exploration of this by Dave Dayen in The American Prospect, covering some of the internal politics. Sausage-making at its best!
 

Brett Cease
3781 Posts

Thanks @Dana Nuccitelli for this excellent and important summary! For those interested in hearing a more in-depth take we know that Resources For the Future will be hosting a webinar on May 23, 2024 at 2:30 pm ET, register here: https://www.rff.org/events/rff-live/transforming-transmission-unpacking-fercs-new-regional-transmission-planning-rule/ 


 

Rob Johnson
106 Posts

@Dana Nuccitelli
20 yeas out ?   Looks like that negates the need for Big wires.   

Hi @Rob Johnson. The FERC rule only deals with transmission within regions, not between regions as BIG WIRES does. We need both 🤓

Rob Johnson
106 Posts

@Dana Nuccitelli
oh,  if it was 20 years out between regions, that would be perfect, right ?

Pete Marsh
463 Posts

Folks, a suggestion: when we post comments in CCL Community, let's try to add value to the conversation, not be pithy or snarky. We are damn lucky to have folks like Dana on staff at CCL, and if all we do is post a less-than-complete sentence that can't even be interpreted as supportive or dismissive, then we're wasting the time and talent of the incredible resource we are fortunate to have.

Please: bring thoughtful comments here, informed by our own effort to understand. CCL staff are NOT our “Easy Button” for asking about minor little details because we're too lazy to do an internet search.

Tamara Staton
318 Posts

Hi all, 

I recently came across this fantastic article in Forbes.

I like it because it's a really insightful article, easy to follow and learn from.  Might be a great one to share with your networks. Enjoy!

Tamara

 

David Kline
311 Posts

@Tamara Staton

Yes, good article. One small perhaps typo that creates a big problem, though: 

“The same agency said that solar and battery storage will make up 81% of electric generation capacity in 2024. Plant owners will add 62,800 megawatts this year—55% more than last year.” 

They must mean 81% of electric generation capacity ADDED in 2024. That's quite different than what the sentence currently means, which is clearly wrong.
 

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