FERC Orders 1920 and 1977 – What’s the Bottom Line?

The recent buzz in the electric transmission industry, which is a key part of utility-scale renewables growth, is the May 13^th issuing of FERC Order 1920 and FERC Order 1977 .   

FERC Order 1920

FERC Order 1920, “Building for the Future Through Electric Regional Transmission Planning and Cost Allocation” has been the long-awaited rule to assist the expansion and upgrade of the North American transmission system.

Among other things, the rule requires transmission providers to produce a 20-year transmission plan for their area every 5 years, using scenario-based analysis. The development of the plans identifies seven factors transmission providers must consider when creating the planning scenarios.

As Tory Lauterbach, a partner in the energy and climate practice at Foley Hoag, LCC said in a recent “Factor This” podcast,  the 7^th factor which states “utility and corporate commitments and federal, federally-recognized Tribal, state, and local policy goals that affect Long-Term Transmission Needs” is notable.  As US policy goals have recently advocated for more renewable energy, this factor bodes well for the clean-energy industry.  However, it also invites opposition from fossil-fueled generation providers and states with large amounts of that generation, with the argument that renewables are being favored.

According to Order 1920, transmission providers must also “Consider transmission facilities that address interconnection-related needs identified multiple times in existing generator interconnection processes, but that have not been built.”  This is another positive outcome for renewable energy.

Other provisions in the very extensive rule include the requirement that transmission providers consider advanced transmission technologies, or grid-enhancing technologies, as well as rulings around cost allocation and state agreement processes for regional transmission projects.  Cost allocation between states, suppliers and consumers, and different consumer classes continues to be contentious.

FERC Order 1977

FERC Order 1977, “Applications for Permits to Site Interstate Electric Transmission Facilities”, is applicable to “backstop” transmission siting procedures, for the limited cases in which FERC is called upon to exercise its planning authority.  

These limited cases are for regional lines designated by the DOE as national interest electric transmission corridors.   

In the Order 1977 press release, FERC Chairman Willie Phillips said “… I recognize the primary role of the states in siting transmission within their borders”.   However, this rule will come into play when coordination between states becomes an obstacle for projects in these national interest corridors.

The Bottom Line

What does all this mean?  These two orders, including others such as the July 2023 FERC Order 2023 “Improvement to Generator Interconnection Agreements and Procedures”,  are important for advancing electric transmission and the clean-energy economy. 

However, they are not a cure-all panacea – they are just two parts in today’s dynamic, complex electric power industry.  Keep in mind that with transmission infrastructure, both the federal government and state governments are in constant tension, and Order 1920 in particular may further increase the tension between federal and individual state goals around clean energy.

And for the impatient ones among us, changes will not occur overnight.  As with all legal topics involving the federal government, state governments, and many companies and advocacies, there will be more discussions and appeals in the years-long process.   

Nonetheless, on the sunny side, the Orders are another step forward in the clean-energy economy.

Tim Taylor is a HeatSpring instructor who focuses on utility transmission and distribution systems, and the interconnection of renewables to those systems.

Tim’s new course, “Introduction to Transmission” is live on HeatSpring.  “Interconnection of Solar PV to Transmission” is scheduled to go live in June.  You can sign up for either course separately or sign up for both courses in a discounted course bundle on HeatSpring.