Regulatory Affairs news highlights: June 2024

 

Recent regulatory headlines we’re tracking include:

FERC issues landmark Order 1920 on regional transmission planning and cost allocation

On May 13, FERC issued a high-profile order (Order 1920) on regional transmission planning and cost allocation. FERC noted that the order is the first time FERC has ever directly addressed the need for long-term transmission planning, and the docket includes thousands of pages of comments from stakeholders (the largest public record ever considered by FERC).

The order finds that regional transmission planning and cost allocation to meet long-term transmission needs is not occurring on a sufficient basis, resulting in “piecemeal” transmission expansion. The order requires transmission providers to conduct regional transmission planning on a sufficiently long-term, forward-looking, and comprehensive basis to identify long-term transmission needs. These requirements for transmission providers include:

• Planning at least 20 years out to identify long-term needs and the facilities needed to meet those needs.
• Conducting long-term planning at least every five years using specific scenarios and applying specific factors (such as laws/regulations, integrated resource plans, fuel costs, generator retirements, interconnection requests/withdrawals, and policy goals and corporate commitments).
• Using an evaluation process to identify long-term regional transmission facilities for potential selection in the regional plan, considering at least seven specific economic and reliability benefits during the evaluation (e.g., reduced loss of load probability, mitigation of extreme weather events, reduced congestion).
• Including a process to allow states and customers to fund all or a portion of the cost of long-term regional transmission facilities that otherwise would not meet the transmission provider’s selection criteria.
• Reevaluating long-term regional transmission facilities that previously were selected in a regional transmission plan, if there are delays or cost overruns.
• Considering transmission facilities that address interconnection-related needs identified multiple times in existing generator interconnection processes, but that have not been built.
• Considering the use of grid enhancing technologies such as dynamic line ratings, advanced power flow control devices, advanced conductors and transmission switching.
• Filing one or more methods to allocate the costs of the long-term regional transmission facilities that are selected.
• Holding a “six-month engagement period” with relevant state entities to discuss/negotiate cost allocation methods and/or a create a “state agreement process” prior to the order’s compliance deadline.

For additional information, see FERC’s press release on the order, Chair Willie Phillip’s media briefing, and FERC staff’s presentation of the order to the commissioners.

 

FERC issues Order 1977 on interstate electric transmission facility siting process

FERC also issued Order 1977 on May 13, which updates regulations governing the permitting process for the limited circumstances when FERC is called upon to exercise its transmission siting authority. The authority to site electric transmission facilities has traditionally resided with states, but Section 216(b) of the Federal Power Act (FPA) authorizes FERC, in specific circumstances, to issue permits to build or modify electric transmission facilities in National Interest Electric Transmission Corridors (NIETCs) designated by the Department of Energy (DOE). Key provisions in Order 1977 include the following:

• Clarification that FERC has the authority to issue permits to construct or modify electric transmission facilities in a NIETC if a state has denied a siting application. These clarifications reflect recent amendments to FPA Section 216 enacted under the Infrastructure Investment and Jobs Act of 2021.
• Creation of a “Landowner Bill of Rights,” which requires notification of landowners who would be affected by a proposed transmission line of their right to intervene in any open FERC proceeding.
• Creation of an “Applicant Code of Conduct,” which specifies ways that an applicant can demonstrate that it has “made good faith efforts to engage with landowners early in the applicable permitting process” as required by FPA Section 216(e)(1). (The Infrastructure Investment and Jobs Act of 2021 amended FPA Section 216(e) to require FERC to determine, as a precondition to a permit holder exercising eminent domain authority, that the permit holder has made “good faith efforts to engage with landowners and other stakeholders early in the applicable permitting process.”)
• A requirement for applicants to develop 1) engagement plans that describe completed and planned outreach to environmental justice communities and American Indian tribes and 2) new resource reports on the project’s impacts on air quality and environmental noise, environmental justice communities, and tribal resources.

 

U.S. Senate Energy and Natural Resources Committee holds hearing on growth in demand for electric power 

On May 21, the Senate Energy and Natural Resources Committee held a hearing on the opportunities, risks, and challenges associated with growth in demand for electric power. Sen. Joe Manchin (D-WV) provided opening remarks, noting the challenge faced by the electric industry to meet unprecedented demand growth caused by increases in technology and manufacturing, artificial intelligence and data centers, and electric vehicles, while citing NERC’s 2023 Long-Term Reliability Assessment forecast predicting 90 GW of demand growth by 2030. Manchin also noted that he and Sen. John Barrasso (R-WY) have been working on a permitting bill that they will share soon.

The hearing featured four witnesses: Ben Fowke, interim CEO and president of American Electric Power (AEP); Karen Onaran, president and CEO of the Electricity Consumers Resource Council; Scott Gatzemeier, corporate vice president of front-end U.S. expansion at Micron Technology; and Mark Mills, executive director at the National Center for Energy Analytics. The witnesses expressed concerns about the increasing demand for power paired with the retirement of conventional generation resources.

For example, Fowke discussed how power demand from data centers is expected to double nationwide in three years, and that in some areas, demand is growing faster than capacity. He noted that AEP currently has requests from large customers that would more than double the existing peak demand AEP serves today. Mills discussed how AI-infused data centers may require up to four times the amount of power as those without. The full webcast of the hearing can be viewed here, as well as remarks from Manchin and written testimony from Ben Fowke, Karen Onaran, Scott Gatzemeier, and Mark Mills.