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FERC Approves Two Major Rules to Facilitate Expansion of the Transmission Grid


On May 13, 2024, by a vote of 2-1, FERC approved Order 1920, requiring transmission providers to conduct scenario-based transmission planning at least every five years for a time horizon of at least 20 years.

Transmission providers also must conduct a benefits analysis using at least seven enumerated factors to evaluate and select long-term regional transmission facilities.

Order 1920 requires transmission providers to develop an ex ante cost allocation method, and separately consider adoption of a state agreement process for cost allocation of regional facilities.

The order also requires transmission providers to consider alternative transmission technologies, and an evaluation of regional transmission facilities identified through interconnection processes.

The final rule declined to provide incumbent utilities with a blanket conditional right of first refusal (ROFR) but provided a ROFR for incumbents that are developing transmission facilities that have been “right-sized.”

The Commission also retained the Construction Work in Progress incentive for transmission providers which had been proposed for elimination.

In a separate action, FERC approved Order 1977, which clarifies FERC’s authority to permit transmission projects located within Nation Interest Electric Transmission Corridors when states deny siting applications.

Order 1977 requires transmission developers to demonstrate engagement with landowners, environmental justice communities, and Indian Tribes.

Permitting applications submitted to FERC must include, among other things, reports on air quality and environmental noise; environmental justice; and tribal resources.

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