What FERC should do to enable interregional electric transmission

Abstract

The Federal Energy Regulatory Commission (FERC) on May 13, 2024 issued its Order 1920: “Building for the Future Through Electric Regional Transmission Planning and Cost Allocation”. Years in the making and building on its previous Order 1000 and others, this 1363-page Order is being hailed as a landmark in promoting needed electric transmission development in the United States going forward. While establishing needed detailed requirements for transmission planning within regions, the Order stopped short of addressing interregional planning other than identifying issues related to it.

Expanding on the traditional concept of intraregional transmission planning, interregional planning offers advanced benefits including reduced production (fuel) costs, improved generation capacity sharing, increased clean energy supplies, reduced renewables curtailment, and improved reliability and resiliency by providing transmission support between regions.

On a parallel path, Congress has recently become very active in efforts related to encouraging interregional transmission. Multiple bills have been introduced the past two years, addressing permitting reform, requirements for interregional planning, specification of minimum interregional transfer capacity, and offering investment tax credits, among other topics. While Order 1920 is now subject to numerous appeals and lawsuits that will take time to be resolved, and the Congressional bills remain to be potentially combined and passed, these are all positive signs for interregional transmission development going forward.

Meanwhile, the authors have been engaged the past several years in working with multiple utilities toward development of the Power from the Prairie (PftP) interregional transmission project (www.powerfromtheprairie.com). While these utilities whom the authors recruited are a select few who can think outside their service territories toward potential interregional collaboration, significant challenges and obstacles still exist. These represent the real-world issues of whether interregional transmission can actually occur.

This article combines the content of FERC Order 1920 and the various Congressional bills with the on-the-ground experience with utilities thinking about doing interregional transmission. The authors conclude that there is much more FERC can and should do going beyond Order 1920, in concert with Congress and others, to enable interregional transmission development to happen. A “Road Map” of potential next actions by FERC is suggested. In addition, the need to form a new entity that takes a more holistic interregional transmission planning view to overcome current industry inertia is also discussed.