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US FERC passes rule to expand electric transmission grid, pay for major power lines

By Esther Whieldon

August 18 - An independent federal agency that regulates the interstate transmission of electricity, natural gas, and oil, has issued a rule designed at its heart to ensure there is enough electric transmission being planned to meet future US electricity needs and that there are processes for determining who pays for certain new power lines.

The July 21 US Federal Energy Regulatory Commission rule, called Order 1000, requires regional electric transmission facility planners and electric utilities that own transmission to have regional transmission planning processes and methods for coordinating with neighboring regions to determine the most cost-effective and efficient solutions to future expected transmission needs, whether they be local or interregional.

These solutions are likely to, but may not always involve construction of new lines or upgrades to existing electric transmission facilities. If transmission lines are the answer, the projects may cross multiple states and/or regions. Some transmission planning regions include multiple states. (Listen to related podcast.)

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Planning for state and federal policies

While many regions are already required to perform transmission planning under a prior FERC order, Order 1000 mandates a number of new things including consideration of existing state and federal public policy requirements such as renewable portfolio standards or regulations by the Environmental Protection Agency that may affect when, where and how much transmission would be needed.

The rule does not specify specific state or federal mandates to consider in regional planning, but only that there be a process for taking those policies into account.

For example, a state renewable portfolio requirement may lead to a utility importing power from wind and/or solar resources in other states or regions.

Fossil-fueled power plants can be built relatively near where additional power will be needed. But power projects fueled by wind and some other renewable resources are often located far from where the power is needed because the resource can be harnessed only at those remote locations.

The solution to transporting that renewable power to consumers to satisfy the state policy may be a new high voltage line that crosses multiple states or regions.

FERC's rule is designed to help regions foresee such a need and plan for it. But the order does not mandate the construction of transmission itself.

Among other things, transmission planning regions would create and implement procedures to share and jointly evaluate information regarding regional needs and potential solutions. The information must be shared between neighboring planning regions at least annually.

FERC-jurisdictional transmission owning utilities are required to participate in regional processes that develop regional plans.

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