transmission

On May 13, the Federal Energy Regulatory Commission (FERC or Commission) issued Order No. 1920, the Commission’s long-awaited final rule regarding regional electric transmission planning and cost allocation for future transmission projects on the nation’s interstate electric grid.  Order No. 1920 revises key aspects of the Commission’s current regional transmission planning and cost allocation policies, largely adopted in 2011 in Order No. 1000, in an effort to help accelerate the buildout of transmission infrastructure needed to serve the country’s changing resource mix and growing energy demand projections. 

The major reforms adopted by FERC in Order No. 1920 center around four key areas: (A) planning horizon; (B) developing planning scenarios; (C) selection of transmission solutions and (D) cost allocation, each discussed in more detail below. At a high level, the rule requires transmission providers to engage in long-term regional transmission planning at least 20 years in advance, use at least seven enumerated benefits for the evaluation and selection of long-term regional transmission facilities, and hold a six-month engagement period for relevant state entities before filing a cost allocation method for a chosen project with FERC. Yet, while the Commission’s overarching goal of Order No. 1920 appears to be the selection of efficient long-term regional transmission solutions by transmission providers, the rule makes no mention of National Interest Electric Transmission Corridors (National Interest Corridors), geographic areas designated by the Department of Energy (DOE) where transmission congestion or constraints have an adverse effect on consumers, and where, in certain circumstances, FERC has siting authority for transmission facilities under the Federal Power Act (FPA).     Continue Reading FERC Issues Order No. 1920 To Accelerate Regional Transmission Planning

On May 1, 2024, the White House Council on Environmental Quality (“CEQ”) published its final “Phase 2” National Environmental Policy Act (“NEPA”) regulations, formally called the Bipartisan Permitting Reform Implementation Rule (“Final Rule”). Publication of the Final Rule completes a multi-year effort by the Biden Administration that included publication of final, narrower “Phase 1” rule in April 2022. The Final Rule is predominantly consistent with the 2023 proposed rule, which is analyzed in an earlier blog post.

CEQ’s Final Rule is notable in many respects. It advances sound environmental analysis to inform the public and decisionmakers while implementing new efficiencies to help accelerate the environmental permitting process for infrastructure projects, from solar, wind, and transmission lines to federally-funded domestic manufacturing projects. In this regard, the Final Rule is a key component of the Biden Administration’s commitment to advancing domestic infrastructure, including projects aligned with the Biden Administration’s climate and clean goals that are being further propelled by federal grants and tax incentives pursuant to the Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA). Continue Reading CEQ Final NEPA Regulations and Department of Energy Actions Aim to Responsibly Accelerate Clean Energy, Transmission, and Other Infrastructure Development

Driven by the entry of renewable generation resources locating far from load centers and the new demands placed on the grid by their differing characteristics, the Federal Energy Regulatory Commission (FERC) launched a comprehensive review of its policies regarding regional transmission planning, interconnection and cost-allocation.  In an Advance Notice of Proposed Rulemaking (ANOPR), the agency requested public comments on its current policies and offered potential areas for reform with a view toward anticipated future generation.  According to FERC Chairman Richard Glick, “(a) piecemeal approach to expanding the transmission system is not going to get the job done. We must take steps today to build the transmission that tomorrow’s new generation resources will require.”
Continue Reading FERC Reviewing Rules for Grid of the Future

This is the fifteenth in our series on “The ABCs of the AJP.”

Historically, offshore wind has made up a very small percentage of America’s total electricity generation portfolio.  The winds of change are blowing, though, as the Biden Administration’s American Jobs Plan (“AJP”), among other federal actions, signals a new commitment to harnessing this renewable energy source.
Continue Reading Optimism Abounds for Offshore Wind

This blog is the twelfth in our series, “The ABCs of the AJP.”

Power lines, strung between high-voltage transmission towers, are etched across the American landscape. Yet the United States’ current transmission infrastructure is outdated and inefficient, plagued by bottlenecks and weak interconnections across regions, which limit the grid’s ability to integrate renewable generation and its overall resilience. Improving and expanding the Nation’s transmission infrastructure is therefore central to the American Jobs Plan’s (AJP) grid modernization, decarbonization and job-creation goals.
Continue Reading Lines, Labor and Leveraging Capital: How the AJP Would Upgrade Transmission Infrastructure

This blog is the seventh in a series, “The ABCs of the AJP.”

Grid Modernization and Resiliency

Grid modernization and resiliency are critical and intertwined issues that only grow more important as climate change increases the frequency and severity of extreme weather events. As the Biden Administration notes in its American Jobs Plan fact sheet, recent power outages in Texas took a tremendous human and economic toll, and power outages generally cost the country $70 billion dollars a year in lost productivity. In light of that figure, the American Jobs Plan’s proposed $100 billion dollar investment in grid modernization may be too conservative. When factoring in health and environmental benefits, the return on investment for an improved grid looks to be extraordinarily robust.
Continue Reading Grid Modernization and Greenhouse Gases

The Federal Energy Regulatory Commission (FERC) has proposed substantial changes to its policies for awarding ratemaking incentives for new transmission investment.  The most fundamental change is that FERC would no longer award incentives based on a proposed project’s risks and challenges but would instead award them based on its economic and reliability benefits.  In addition, the incentive for a higher return on equity for project investment would be potentially more generous than under the current policy.  FERC’s proposal should be of interest to utilities, transmission-only companies, market participants who pay transmission rates, customers and investors interested in developing transmission projects.
Continue Reading FERC Considering Changes to Transmission Incentives

As part of an ongoing effort to address issues raised by, and encourage the entry of, distributed energy resources, the Federal Energy Regulatory Commission (FERC) last week issued a Policy Statement clarifying the flexibility electric storage resources have regarding rate designs to recover their costs.  FERC earlier proposed rules to remove barriers to the participation of storage and other distributed resources in the organized wholesale electricity markets administered by Regional Transmission Organizations (RTOs).  These policies and rules are of interest to storage operators and investors, grid managers, other participants in RTO markets and consumers of storage services.

Storage resources, such as large-scale batteries and flywheels, are able to both absorb and discharge electricity.  These resources can provide multiple services almost instantaneously and thus may fit into more than one of the traditional asset functions of generation, transmission, and distribution.  The Policy Statement provides guidance for storage resources that want to charge rates for providing multiple types of services.
Continue Reading FERC Clarifies Cost Recovery Flexibility for Electric Storage Resources

Amid concerns regarding the impact on reliability of EPA’s proposed Clean Power Plan (“CPP”), FERC scheduled a series of technical conferences to discuss the impacts of state, regional and/or federal plans for compliance with EPA’s proposed rule.  Such plans could affect electric reliability, wholesale electric markets and operations, and energy infrastructure.  FERC recently held the…