The Federal Energy Regulatory Commission on May 13 approved a final rule that adopts specific requirements addressing how transmission providers must conduct long-term planning for regional transmission facilities and determine how to pay for them, so needed transmission is built.
The final rule, Order No. 1920, “marks the first time in more than a decade that FERC has addressed regional transmission policy – and the first time the Commission has ever squarely addressed the need for long-term transmission planning,” FERC said in a news release.
It said that the final rule “reflects more than 15,000 pages of comments from nearly 200 stakeholders representing all sectors of the electric power industry; environmental, consumer and other advocacy groups; and state and other government entities.”
FERC said that the rule contains these major elements:
- Requirement to conduct and periodically update long-term transmission planning to anticipate future needs.
- Requirement to consider a broad set of benefits when planning new facilities.
- Requirement to identify opportunities to modify in-kind replacement of existing transmission facilities to increase their transfer capability, known as “right-sizing.”
- Customers pay only for projects from which they benefit.
- Expands states’ pivotal role throughout the process of planning, selecting, and determining how to pay for transmission facilities.
Long-Term Regional Transmission Planning
More specifically, the rule requires each transmission operator to:
- Produce a regional transmission plan of at least 20 years to identify long-term needs and the facilities to meet them.
- Conduct this long-term planning at least once every five years using a plausible and diverse set of at least three scenarios that incorporate specific factors and use best available data.
- Apply seven specific benefits to determine whether any identified regional proposals will efficiently and cost-effectively address long-term transmission needs
- Include an evaluation process to identify long-term regional transmission facilities for potential selection in the regional plan.
It also requires each transmission operator to include a process giving states and interconnection customers the opportunity to fund all, or a portion, of the cost of a long-term regional transmission facilities that otherwise would not meet the transmission provider’s selection criteria.
And, in the event of delays or cost overruns, transmission operators will need to reevaluate long-term regional transmission facilities that previously were selected in a regional transmission plan.
They will also need to:
- Consider transmission facilities that address interconnection-related needs identified multiple times in existing generator interconnection processes, but that have not been built.
- Consider the use of Grid Enhancing Technologies such as dynamic line ratings, advanced power flow control devices, advanced conductors and transmission switching.
Cost Allocation Provisions
The rule contains these cost-allocation provisions:
- Before applicants submit compliance filings, they must open a six-month engagement period with relevant state entities.
- Applicants must propose a default method of cost allocation to pay for selected long-term regional transmission facilities.
- Applicants may propose, a state agreement process that lasts for up to six months after a project is selected for participants to determine, and transmission providers to file, a cost allocation method for the selected facilities.
Interregional Transmission Coordination
The rule also requires transmission providers to:
- Be transparent regarding local transmission planning information and conduct stakeholder meetings during the regional transmission planning cycle about the local process.
- Identify opportunities to modify in-kind replacement of existing transmission facilities to increase their transfer capability, known as “right-sizing,” when needed.
- Give incumbent transmission owners a right of first refusal to develop these “right-sized” replacement facilities.
- Revise existing interregional transmission coordination processes to reflect the new long-term regional transmission planning reforms.
The rule takes effect 60 days after publication in the Federal Register. Compliance filings with respect to most of the rule’s requirements are due within 10 months of the effective date, while filings to comply with the interregional transmission coordination requirements are due within 12 months of the effective date.
FERC Approves Backstop Transmission Siting Procedures
Separately, FERC on May 13 unanimously approved a rule outlining how it plans to implement its limited authority over siting electricity transmission lines, as amended by Congress in 2021.
The new rule, Order No. 1977, updates the process to be used in the limited circumstances when the Commission is called upon to exercise its siting authority.
Order No. 1977 includes a Landowner Bill of Rights, codifies an Applicant Code of Conduct as one way for applicants to demonstrate good-faith efforts to engage with landowners in the permitting process, and directs applicants to develop engagement plans for outreach to environmental justice communities and Tribes.
The rule does not adopt the proposal to allow simultaneous processing of state and FERC siting applications.
The Landowner Bill of Rights notifies landowners who would be affected by a proposed transmission line of their right to intervene in any open Commission proceeding. A transmission line applicant must include a copy of the Landowner Bill of Rights with the pre-filing notification mailed to affected landowners.
Order No. 1977 also requires applicants to produce Tribal Resources Reports, which consolidate existing requirements for information describing effects on Tribes, Tribal lands and Tribal resources.
Applicants must identify potentially affected Tribes and describe the impacts of project construction, operation and maintenance on Tribes and Tribal interests. Additionally, they must develop Tribal Engagement Plans that describe outreach activities that may affect Tribes.
The new rule requires applicants to develop Environmental Justice Public Engagement Plans describing outreach activities targeted at potentially affected environmental justice communities.
FERC said this information will inform the new Environmental Justice Resource Reports that identify potentially affected environmental justice communities and describe the effects of project construction, operation and maintenance on those communities, including whether any impacts would be disproportionate and adverse.
Order No. 1977 will take effect 60 days after publication in the Federal Register.
