What Trump’s election win means for FERC, US utilities and the grid

On the campaign trail, President-elect Donald Trump railed against clean energy policies enacted under the Biden-Harris administration, vowed to throttle offshore wind development “on day one” and end the “Green New Scam.” It’s still unclear if Trump will attempt to dismantle the landmark Inflation Reduction Act, which pumped billions into clean energy technologies like solar panel and electric vehicle manufacturing, investments that have largely benefited Republican-led communities.

For all the pontificating before and immediately after the election on Trump’s impact on, well, everything, the future of power grid planning, and the Federal Energy Regulatory Commission (FERC), has taken a backseat. But FERC, which is led by commissioners who are nominated by the president, plays an outsized role in charting the direction of the energy industry and its pursuit of what remains of the nation’s climate goals. And they’ve been busy.

In 2023, FERC tackled the country’s slow and backlogged interconnection queues with Order 2023. In May, FERC released Orders 1920 and 1977 in what Chair Willie Phillips called a “watershed” moment for the US energy system. The orders require proactive regional transmission planning and a permitting backstop, respectively, to address the nation’s woefully inadequate transmission supply. Utilities will submit compliance filings over the coming months as FERC works toward implementation.

So, what will happen with FERC, the transmission grid regulator, and its ongoing initiatives to evolve the US energy system? While uncertainty about Trump’s impact extends to many, if not all, areas of the energy industry, FERC “appears” to be more settled, at least according to industry experts within FERC World. A new president can’t immediately appoint new commissioners like with other federal agencies.

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“With a full commission and quorum expected to continue for multiple years at a minimum, FERC should be able to work continuously well into the new administration,” said Tory Lauterbach, a partner working on energy policy and litigation at the law firm Gibson Dunn. “FERC enjoys some insulation from the whims of politics and I think that’s by design. To the extent there are changes in FERC’s balance, they occurred more slowly over time.”

Lauterbach has her eyes trained on federal appeals courts to see if the “playing field” changes significantly due to Trump’s judicial nominees. Whether or not it does could impact the future of existing FERC initiatives.

The deadline for compliance with Order 2023 — the interconnection reform ruling — passed months ago, and the backstop siting rule, Order 1977, wasn’t controversial. FERC’s implementation of Order 1920, however, could get messy due to a pending rehearing order, Lauterbach flagged, since the positions of FERC’s three newest commissioners — David Rosner, Lindsay See, and Judy Chang — are unknown. “But I am not sure the election results will much affect their views.”

Nailing down a definitive energy policy direction for the Trump-Vance administration, at least at this stage, could be tricky.

There could be a “revenge tour,” not just by Trump but also by those around him, cautioned Liam Donovan, a senior political strategist for the energy law firm Bracewell, during a post-election reaction webinar. “What’s their agenda, and what do they intend to do?”

Squaring Trump’s attacks on clean energy with his intent is additionally complicated by his newfound friendship with Tesla founder and solar advocate Elon Musk. Musk and billionaire investor Peter Thiel have both called for a significant expansion of electricity to power data centres for AI applications.

Grid Strategies, a consultancy supporting utilities, grid operators and regulators, estimates at least 38GW of peak demand growth through 2028, driven by the development of data centres and industrial and manufacturing facilities. Power grid investments, especially on transmission, aren’t keeping up with that growth, either. The US installed 1,700 miles of new high-voltage transmission miles per year on average in the first half of the 2010s but dropped to only 645 miles per year on average in the second half of the decade. Investor-owned utility investment in transmission serving new load, meanwhile, has decreased over the past three years, according to data from Edison Electric Institute.

“That will be a key dynamic to watch,” Rob Gramlich, president of the utility and grid operator consultancy Grid Strategies, said of Trump’s alignment with Big Tech leaders, like Musk and Thiel. “Electricity-intensive manufacturing for items like chips, along with crypto mining and data centers, will likely drive grid expansion.”

Transmission advocates could potentially benefit from Trump’s desire to fast-track permitting for oil and gas pipelines, but that may not come in the form of the long-awaited energy permitting reform bill that passed the Senate in July. While a bipartisan effort, the bill has been stuck in the Republican-controlled House, and some large utilities are reportedly lobbying lawmakers to stop it.

Rep. Nikki Budzinski of Illinois called the election night loss a “sobering moment for us as Democrats” but believes the permitting reform will enjoy bipartisan support in the next Congress, too.

“Top of mind for me is permitting reform,” Budzinski said. “We need to be building more, faster, and all of the above to meet our energy needs.”

Originally published by John Engel on power-grid.com