Today the Federal Energy Regulatory Commission (FERC) issued a rule through Order 1920 that will bring regional transmission planning into the modern era. This rule is a particularly big deal for the Southeast, as it will now require regional utilities to plan for the future and find ways for transmission to lower costs, improve reliability, and improve utilities’ ability to connect clean energy resources to the grid at the pace required to decarbonize the electricity sector.

Currently, regional transmission “planning” in the Southeast is conducted by an entity called the Southeastern Regional Transmission Planning (SERTP). The SERTP process is run by utilities, and meets the bare minimum of requirements from FERC’s Order 1000. That means that SERTP’s current process does not result in any transmission plans that provide regional benefits, but instead stacks each utility’s transmission plans together like layers of a cake.

Under Order 1920, SERTP will have nearly a year to file a compliance plan outlining changes to its process to meet Order 1920 requirements.

This order will change regional transmission planning in the Southeast by requiring SERTP to: look out farther into the future (at least 20 years); look at multiple potential futures (at least 3 scenarios); and look at multiple benefits. FERC requires consideration of seven specific benefits:

1. Avoided or deferred reliability transmission facilities and aging infrastructure replacement
2. Either reduced loss of load probability or reduced planning reserve margin
3. Production cost savings
4. Reduced transmission energy losses
5. Reduced congestion due to transmission outages
6. Mitigation of extreme weather events and unexpected system conditions
7. Capacity cost benefits from reduced peak energy losses

FERC Chairman Willie Phillips stated that the Order’s number (1920) was chosen as a tribute to the creation of the Federal Power Commission (FPC), FERC’s predecessor, which was created by Congress in 1920. He goes on to state that the FPC was formed “to solve the urgent national challenge of how to develop energy infrastructure… needed to meet the demands of an emerging global superpower. Why did Congress do that? Because in 1920… Congress had fully grasped that large-scale development of the nation’s power infrastructure was essential.” Phillips continued, saying that “even in 1920 we as a country recognized that, when it comes to the electric system, we are all in this together.”

FERC also issued a second rule related to transmission today: Order 1977, focused on streamlining the permitting process for electric transmission. This order will also be impactful in the Southeast, however it is Order 1920 that will more likely address the first roadblock to transmission: shifting from piecemeal transmission within utility fiefdoms to holistic regional transmission planning for the common good.

We at SACE look forward to working with utilities and state regulators across the Southeast to find the best way to implement this rule and get the region on a path to transmission planning for the future.