Transmission

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On May 13, 2024, the Commission announced two major transmission reform final rules: Building for the Future Through Electric Regional Transmission Planning and Cost Allocation (“Order No. 1920”) and Applications for Permits to Site Interstate Electric Transmission Facilities (“Order No. 1977”). Order No. 1920, which adopts specific requirements for how transmission providers must conduct long-term planning and allocate costs for regional transmission facilities, was the subject of significant debate at today’s meeting and only mustered two votes in support from the three sitting commissioners. The Commission unanimously approved Order No. 1977, which updates the process FERC will use in the limited circumstances in which it must exercise its authority over siting electric transmission lines, as directed by Congress in the Infrastructure Investment and Jobs Act of 2021 (“IIJA”).

On December 19, 2023, the Department of Energy (“DOE”) Grid Deployment Office released final guidance on how it will designate National Interest Electric Transmission Corridors (“NIETC”) pursuant to Section 216(a) of the Federal Power Act (“FPA”) and opened the first submission window for public participation and recommendations. The guidance explains that NIETCs will be narrow geographic areas where DOE has identified present or expected transmission capacity constraints or congestion that adversely affects consumers. Designation as a NIETC opens federal funding and financing opportunities, pursuant to the Infrastructure Investment and Jobs Act (“IIJA”) and the Inflation Reduction Act (“IRA”) and conveys eminent domain rights to developers in certain circumstances where FERC is authorized to permit and site the project. Public comments and recommendations are due February 2, 2024.

On November 27, 2023, Troutman Pepper’s award-winning Energy Group published a white paper titled, Unlocking U.S. Transmission Upgrades – Are We On the Cusp of Real Progress?  The white paper offers perspectives from a range of transmission experts and examines the latest regulatory and legal changes that could lead to much-needed upgrades to the U.S. transmission grid.  Specifically, the report discusses why transmission grid upgrades are needed, identifies four main obstacles to upgrading the transmission system, provides solutions and benefits to overcoming these obstacles, and concludes with reasons for optimism for the future of the U.S. transmission system.

On November 17, 2023, the U.S. Court of Appeals of the District of Columbia Circuit (“D.C. Circuit”) denied petitions challenging FERC’s approval of recent changes to the PJM Interconnection, L.L.C.’s (“PJM”) Open Access Transmission Tariff. The changes permit Transmission Owners in PJM to plan for “asset management projects” and certain End of Life (“EOL”) projects without satisfying PJM regional planning criteria. The D.C. Circuit also dismissed certain petitions for lack of standing.

Bridging the Gap Between Planning and Permitting

In recent decades, the U.S. has not been able to construct the volume of high-voltage backbone transmission facilities needed to support the country’s move to a ‘greener’ power system. The inability to build sufficient transmission infrastructure thwarts customer demands for a greener power mix.

In this report, we offer perspectives from a range of transmission experts about where the major roadblocks exist, and the latest regulatory and legal changes that promise to bring greater unity between the divergent federal planning and state siting and permitting processes. These changes provide hope that the U.S. can bridge the gaps that have delayed much-needed upgrades to the transmission system.

On October 30, 2023, FERC accepted the California Independent System Operator Corporation’s (“CAISO”) revisions to its wheeling tariff provisions. The revised provisions allow external load serving entities to obtain, in advance, on a monthly and daily basis, rights to transmit electricity (also known as “wheeling”) through self-schedule priorities equal to the scheduling priority of CAISO demand. The revised provisions also update CAISO’s calculation of Available Transfer Capability (“ATC”).

On October 20, 2023, the U.S. Department of Energy (“DOE”) released the National Transmission Needs Study, a triennial report that assesses electric transmission capacity constraints and congestion on a national scale. While similar to previously issued triennial reports, the 2021 Bipartisan Infrastructure Law expanded the study’s scope to also consider anticipated future transmission constraints and congestion. The study assessed needs through 2040 and revealed a pressing need for additional transmission infrastructure to promote reliability in the face of a shifting resource mix, with the largest benefits stemming from increases to interregional transfer capacity.

On August 10, 2023 in response to incentives made available through the Bipartisan Infrastructure Law and the Inflation Reduction Act, the U.S. Department of Energy (“DOE”) proposed reforms to its regulations governing the coordination of Federal authorizations for the development of interstate, onshore electric transmission facilities and to establish the Coordinated Interagency Transmission Authorizations and Permits Program (“CITAP Program”). The main goal of the CITAP Program, which will be administered by DOE’s Grid Deployment Office, is to “reduce the time required for transmission project developers to receive decisions on Federal authorizations for transmission projects.” Public comments are due by 11:59pm ET on October 2, 2023.

On July 7, 2023, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) issued an opinion rejecting petitioner Hecate Energy Green County 3 LLC’s (“Hecate”) claim that the New York Independent System Operator (“NYISO”) tariff did not contain sufficient detail to put it on notice that NYISO would assess network upgrade costs resulting from non-jurisdictional projects.  Instead, the Court agreed with FERC that because its tariff gave “fair notice,” NYISO “had not impermissibly adopted a practice that was not in its tariff.”

On June 13, 2023, the House of Representatives Subcommittee on Energy, Climate, and Grid Security held a hearing on the “Oversight of FERC: Adhering to a Mission of Affordable and Reliable Energy for America.” The hearing focused on reliability and the transition from fossil fuel generation to renewable resources.