FERC acts on long term transmission planning in the US

The US Federal Energy Regulatory Commission (FERC) has issued Order 1920 as a first for long term planning of the country’s transmission network.

Order 1920, which is based on an extensive three-year stakeholder process, is aimed to enable the meeting of growing demand for reliable electricity, with specific requirements for transmission providers to conduct planning for regional facilities over a 20-year horizon.

In particular operators are required to identify the long term needs and the facilities to meet them, as well as how they are paid for with updates on a five-yearly basis.

With this the Order marks the first time in more than a decade that FERC has addressed regional transmission policy and the first to squarely address the need for long-term transmission planning.

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“Our country is facing an unprecedented surge in demand for affordable electricity while confronting extreme weather threats to the reliability of our grid and trying to stay one step ahead of the massive technological changes we are seeing in our society,” commented FERC chairman Willie Phillips.

“Our nation needs a new foundation to get badly needed new transmission planned, paid for and built. With this new rule, that starts today.”

The Order sets out seven specific benefits that must be applied to determine the efficiency and cost-effectiveness of regional proposals to address long-term transmission needs.

These are avoided or deferred reliability transmission facilities and aging infrastructure replacement; either reduced loss of load probability or reduced reserve planning margin; production cost savings; reduced transmission energy losses; reduced congestion due to transmission outages; mitigation of extreme weather events; and capacity cost benefits from reduced peak energy losses.

Rightsizing and grid-enhancing technologies

Another key requirement is to identify opportunities to modify replacement of the existing transmission facilities to increase their transfer capacity, termed ‘right sizing’.

In such cases, the incumbent transmission owners must be given right of first refusal to develop these ‘right-sized’ replacement facilities.

The use of grid enhancing technologies such as dynamic line ratings, advanced power flow control devices, advanced conductors and transmission switching, also is specified as a consideration although not yet mandated.

Regarding the payment of transmission facilities, before a filing is submitted a six-month engagement period must be opened with the relevant state entities.

Applicants also are required to propose a default method of cost allocation to pay for selected facilities and may propose a state agreement process to determine and file a cost allocation method for the facilities.

The Order takes effect 60 days after publication and compliance filings with respect to most of the rule’s requirements are due within 10 months thereafter, while filings to comply with the interregional transmission coordination requirements are due within 12 months.