New rule aims to speed transmission build-out

May 14, 2024

The Federal Energy Regulatory Commission (FERC) has released a final rule updating planning and funding requirements for the nation’s electric grid. Owners of transmission facilities and infrastructure will now be required to plan 20 years ahead, consider a broader set of benefits, and take into account factors including anticipated changes to the mix of energy sources, renewable energy requirements in different states, and weather risks.

The new rule also addresses who pays for new transmission. Some states that would host transmission lines but that are unenthusiastic about renewable energy have argued that they should not have to pay to help other states achieve their renewable energy goals, effectively giving individual states veto power over multistate transmission proposals. The new rule provides guidelines for developing cost-allocation formulas to help overcome these objections. “We cannot fund essential interstate transmission infrastructure by asking the states to get together and pass around the hat,” FERC Commissioner Allison Clements said. “The urgency is too acute and the consequences of failure are too costly.”

Across the country, numerous new energy development projects have been proposed, but face challenges getting the energy they would produce onto the grid. The new rule aims to ease some of these bottlenecks. Lawmakers in Congress have been discussing for years the possibility of legislative permitting reform, but prospects for a compromise are dimming, and would have required measures to support fossil fuels in order to win enough support. The FERC rule avoids some of these problems. “I always thought in the back of my mind FERC would be an alternative if we couldn’t get it through the Senate,” said Senate Majority Leader Chuck Schumer.

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