The Federal Energy Regulatory Commission (FERC) took significant action to ensure the reliability of the nation's electricity grid. With the introduction of the new rule, Order No. 1920, FERC has initiated a comprehensive framework for the planning and financing of transmission facilities crucial to meeting the increasing demand for electricity across the United States.

This ruling represents a pivotal moment as FERC addresses regional transmission policies for the first time in over a decade. More notably, it marks the Commission's inaugural effort to directly confront the imperative of long-term transmission planning.

According to FERC, the grid rule adopts specific requirements for transmission providers to conduct long-term planning for regional transmission facilities and determine how to pay for them. It reflects tens of thousands of pages of comments, filed over the course of the past three years, from hundreds of stakeholders representing all sectors of the electric power industry, advocacy groups and state and other government entities. 

20 years to be ready 

The rule requires transmission operators to conduct and periodically update long-term transmission planning over a 20-year time horizon to anticipate future needs. It also provides for cost-effective expansion of transmission that is being replaced, when needed, known as “right-sizing” transmission facilities. And it expressly provides for the states’ pivotal role throughout the process of planning, selecting, and determining how to pay for transmission lines.

“Our country is facing an unprecedented surge in demand for affordable electricity while confronting extreme weather threats to the reliability of our grid and trying to stay one step ahead of the massive technological changes we are seeing in our society,” FERC Chairman Willie Phillips said. “Our nation needs a new foundation to get badly needed new transmission planned, paid for and built. With this  new rule, that starts today.”

@FERC Order No. 1920 - Securing a Reliable Energy Future. pic.twitter.com/ATFybjacrz

— @FERC (@FERC) May 13, 2024

The U.S. renewable industry has welcomed the news. According to Melissa Alfano, senior director of energy markets and counsel for the Solar Energy Industries Association (SEIA), "the final rule marks a significant turning point for America’s electric grid and our ability to meet growing demand for energy with reliable, low-cost power. We’re pleased FERC took several steps to improve America’s outdated transmission system, including following SEIA’s recommendations requiring transmission providers to engage in long-term regional planning".

For his part, American Clean Power Association (ACP) Vice President of Markets & Transmission, Carrie Zalewski, explained that this announcement is an important step in building out America’s electric grid for a clean, affordable, and reliable energy future. "We commend all those at FERC who have helped reach this important milestone in the development of the transmission infrastructure our nation needs—but it cannot be the finish line. FERC has acknowledged the multiple benefits that transmission provides and has set out a process to ensure that all beneficiaries help to fund projects that reduce customer rates and keep the lights on. If implemented effectively, this will lead to much-needed expansion in transmission capacity on the U.S. grid," she said.