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FERC Approves Long-Awaited Transmission Planning Rule

The Federal Energy Regulatory Commission has approved a “historic” transmission rule intended to bolster U.S. electric grid reliability (Reuters, subscription).

What’s going on: Released Monday, the rule—the first major update to electric transmission policy in more than a decade—“aims to speed up new interregional lines to move more clean energy to meet growing demand amid the [explosive growth] of electric vehicles, data centers and artificial intelligence.”

  • It marks the first time FERC has “squarely addressed the need for long-term transmission planning,” a key step in reaching the Biden administration’s goal of decarbonizing the U.S. economy by 2050.

Why it’s important: “Boosted by tax incentives in Biden’s 2022 Inflation Reduction Act, the queue of power generation projects awaiting a connection to the electric grid is currently around 2,600 gigawatts, twice the amount of generation of the current U.S. power plant fleet, as the grid struggles to integrate new wind, solar and battery power.”

  • What’s more, high-voltage power line construction reached a record low in 2022 (Utility Dive).

What’s in it: The rule requires transmission providers to look ahead at least 20 years when developing plans, such as state energy goals, corporate energy procurement commitments and interconnection queues (Utility Dive). In addition, it requires operators to:

  • Submit plans for splitting project costs between states and the private sector;
  • Weigh seven economic and reliability advantages when considering possible transmission projects, including production cost savings; and
  • Consider alternative transmission technologies—such as advanced power flow control devices, transmission switching and advanced conductors—in place of the building of new lines.

Related: FERC also approved on Monday an order that would give it “backstop siting authority to approve permits for interstate transmission projects that have been rejected or not acted upon by states.”

Our view: “The growing demand for energy and the number of projects awaiting connection to the grid are clear evidence: Congress must act on comprehensive permitting reform to speed up the permitting process in this country,” said NAM Director of Energy and Resources Policy Michael Davin.

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