The Federal Energy Regulatory Commission on Thursday shored up support for its landmark regional transmission rule by boosting the role states will play in planning critical power grid expansions.
Order 1920, adopted in May with the support of only Democratic commissioners, requires that regional grid operators plan 20 years into the future for the high-voltage transmission needed to meet expected electricity needs. In addition, FERC directed that grid operators and states determine the allocation of costs for building long-distance lines.
In its changes to the rule on Thursday, FERC directs that states are given more data on costs. And it ensures that states have a seat at the table as grid planners build out different scenarios for development.
FERC tried to address the chief concerns of critics who felt state regulators were not given enough of a voice in the planning process. Republican-led states argued that ratepayers could be saddled with the high costs of building transmission for the purpose of helping adjoining states meet renewable energy goals.
“This order builds upon an already strong Order No. 1920 and will further enhance the ability of state regulators to provide their important perspectives on the much-needed new transmission facilities,” said FERC Chair Willie Phillips.
“We heard the states loud and clear, and we want to be responsive to them,” said Commissioner David Rosner, a new Democratic member of the commission.
Democrats Phillips, Rosner and Commissioner Judy Chang voted for the rule. Commissioner Mark Christie, a Republican, provided a partial concurrence. The other Republican, Commissioner Lindsay See, did not participate in the proceeding.
Christie’s support for Order 1920-A is notable. In the spring, he opposed the original regulation in a withering dissent. Many of his broader points in opposition were echoed by GOP-led states and utilities who took the rule to court.
Christie called FERC’s additions on Thursday “really big.”
“[States] can ask, for example, that the transmission provider run a baseline scenario consisting of nothing but the optimal reliability and economic projects that would’ve been in their baseline scenario before,” Christie said at FERC’s open meeting.
That, Christie says, is crucial for deciding what each state’s fair share of the transmission upgrades would be since different states have different policies.
“States can now say, ‘If the [difference] is from state policies, we want that allocated to the states whose policies are driving it,’” Christie said.
The Trump effect
Advocates of FERC’s approach to addressing regional transmission needs — both to deal with reliability concerns tied to extreme weather and to move more electricity longer distances — are cautiously optimistic that it can survive under President-elect Donald Trump, who will be able to pick a Republican chair. Trump’s political allies have attacked the order.
Former FERC Commissioner Nora Brownell, a Republican, says Order 1920 is likely solid enough to stand up against legal tests and might survive political pressure. It is designed to increase electric reliability and move more wind and solar power, she said, and that’s compatible with Trump’s promise to promote economic growth.
“If behind the rhetoric there is substance, I would say something like this would stand,” Brownell said.
Order 1920-A adjusts timelines, too. For one, it will allow up to six additional months for cost-allocation discussions at the request of state regulators, which the commission says will ensure a thorough and collaborative process.
It also extends the initiation of the first long-term regional planning cycle from one to two years after initial compliance filings, providing transmission providers with more preparation time.
But electricity demand is expected to increase fast. Ohio-based utility American Electric Power, for example, forecasts a more than 40 percent increase in load by 2030, in large part the result of data center demand.
Christina Hayes, executive director for Americans for a Clean Energy Grid, said in an interview that much of the state collaboration encouraged by 1920-A would have likely occurred anyway.
“Most utilities work very well with their states, knowing that their states are valuable contributors to the process,” she said.
“1920-A provides an option for seeking an extension, but the demands of the electric grid call for acting on planning and building as quickly as possible,” Hayes said. “I’m having a hard time squaring that.”
Brownell echoed Hayes’ concern.
“It’s a politically correct decision. I just don’t know that it’s going to help us as fast as we need the help,” she said.
The commission also approved projects to expand natural gas infrastructure and capacity, including modifications to compressor stations in Texas for increased Gulf Coast service, a new meter station in Pennsylvania for ethane-rich gas delivery and upgrades to the Elba Island LNG Terminal to boost liquefaction capacity.
