Amy Akers is a senior counsel at Clark Hill.
In recent years, the Federal Energy Regulatory Commission (FERC) has focused on enhancing power supply and managing costs for consumers through significant reforms in the transmission process.
Starting in June 2021, FERC opened discussions on various key topics under docket RM21-17. These topics include developing longer-term plans for regional transmission and sharing costs, reassessing who is financially responsible for regional facilities and related upgrades, and improving oversight of the identification and funding of new transmission projects.
With strong support from the industry, FERC proposed new rules in April 2022 to boost the reliability and resilience of the electric grid. These proposals focused on regional planning and interconnection processes.
In June 2022, FERC responded to concerns about a significant backlog of interconnection requests—over 2,000 GW of potential generation—with a Notice of Proposed Rulemaking addressing the need to improve and streamline interconnection procedures.
FERC Approves Key Reforms
In July 2023, FERC continued its efforts to tackle the interconnection backlog by issuing Order 2023. This order aims to ensure new technologies can access interconnection points.
By May 2024, in another significant step under docket RM21-17, FERC released Order 1920. This order mandates that transmission providers plan for future regional facilities over a 20-year period, including the cost-effectiveness of replacing existing infrastructure.
Introducing New Initiatives
To further enhance grid efficiency, FERC released an advanced proposal in June to adopt dynamic line ratings. This technology allows for real-time monitoring and adjustment of the capacity of transmission lines. Moreover, in September, FERC proposed new rules to tackle supply chain vulnerabilities in crucial electric infrastructure, focusing on vendor evaluations and cybersecurity measures.
The Latest Developments
In early 2023, FERC approved several measures to improve reliability and efficiency for transmission systems nationwide.
The Pennsylvania-New Jersey-Maryland Interconnection (PJM) organization, which represents the largest electric grid in the U.S., faced challenges due to a backlog in its interconnection queue. To address potential shortages and rising costs, FERC approved changes to PJM’s rules, allowing “shovel-ready” projects to move forward in the queue.
FERC also temporarily capped the interconnection queue for the Midcontinent Independent System Operator (MISO), which oversees more states than any other grid. This measure is aimed at enhancing efficiency and will be reviewed in three years.
To lower consumer costs and enhance reliability, FERC approved new market pricing reforms for the Southwest Power Pool and California Independent System Operator grids, establishing day-ahead and real-time markets. While these reforms have been successful in the Electric Reliability Council of Texas, MISO, and PJM, they won’t be fully active until mid-2027, pending required studies.
As these initiatives take shape, the transmission market is expected to become more cost-efficient, ultimately leading to improved reliability across the grid. While cost savings may come sooner, the positive effects for consumers are expected to build over time as reliability and efficiency reinforce one another.