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Multi-value project transmission planning was first conducted at MISO in the 2009-2011 timeframe. Now, 13 years later, FERC has caught up to MISO and mandated that all transmission providers conduct long-range transmission planning that is scenario-based and considers multiple benefits of transmission lines. Order 1920 is not a big deal for MISO, but it could be a big deal for PJM and regions that don’t conduct 20-year-out transmission planning.

If the Midwestern state’s Renewable Portfolio Standards were the backdrop behind MISO’s MVP process, data center load and crypto load would be the backdrop of this FERC ruling. The bottom line is that the Federal Energy Regulatory Commission (FERC) has taken a bold step forward with Order No. 1920.

Although this Order 1920 contains much, I am summarizing only the Commission’s determination on grid-enhancing technologies here.

But before I do that -

I realize FERC has not decided on the Independent Transmission Monitor role. FERC side stepped that issue.

FERC acknowledged that some commenters have advanced the concept of ITM, but it didn’t rule on it. I wonder why.

But FERC gave incumbent transmission owners the Federal Right of First Refusal for “a right-sized replacement transmission facility”. So, that’s bad news for independent transmission companies.

This FERC Order 1920 is good news for incumbent transmission companies, as seen from the International Transmission Company press release - “we commend the Commission for taking the important step to expand federal ROFR rights. FERC appropriately weighed the evidence on the record that competitive solicitations have not lowered costs for customers and made a reasoned decision to move ahead with a concrete step to fix the situation.”

By the way, the National Association of Regulatory Utility Commissioners was quick to express disappointment with this FERC Order 1920 - “NARUC is still digesting FERC Order 1920 and evaluating our options, but we are generally disappointed by the significantly diminished state role envisioned by the FERC order with respect to transmission planning and cost allocation.”

Footnote 3613 in FERC Order 1920 is important to understand FERC’s definition of a “right-sized replacement transmission facility” -

FERC states in footnote 3613, “right-sizing could include, for example, increasing the transmission facility’s voltage level, adding circuits to the towers (e.g., redesigning a single-circuit line as a double-circuit line), or incorporating advanced technologies (e.g., advanced conductor technologies). ..for purposes of this right-sizing reform, a new transmission facility that: (1) would meet the need to replace an existing transmission facility that a transmission provider has identified in its in-kind replacement estimate as one that it plans to replace with an in-kind replacement transmission facility while also addressing a Long-Term Transmission Need; (2) results in more than an incidental increase in the capacity of an existing transmission facility that a transmission provider has identified for replacement in its in-kind replacement estimate; and (3) is located in the same general route as, and/or uses or expands the existing rights-of-way of, the existing transmission facility that a transmission provider has identified for replacement in its in-kind replacement estimate.”

So, what ends up happening is that incumbent Transmission Owners will make sure what comes out of Regional Transmission Organizations are replacements to existing transmission facilities, not new transmission facilities so that they have this Federal ROFR.

FERC also took steps towards siting authority. More on that in a future blog.

This directive mandates the inclusion of dynamic line ratings (DLRs) and advanced power flow control devices in long-term regional transmission planning. This blog explores why this rule is a significant milestone for future transmission projects, highlighting its potential to enhance grid reliability, reduce congestion, and foster technological innovation.

Enhanced Grid Reliability and Efficiency

The core of Order No. 1920 is its requirement for transmission providers to consider dynamic line ratings and advanced power flow control devices in their planning processes. DLRs provide a real-time assessment of the transmission line's capacity by accounting for environmental factors such as temperature and wind speed. This dynamic approach allows for a more accurate and adaptable grid management system, ensuring that the transmission lines can handle varying loads without compromising reliability. Similarly, advanced power flow control devices offer precise control over power flows, optimizing the use of existing infrastructure and enhancing overall grid efficiency.

It is not lost on me that transmission owners have been resisting including dynamic line ratings in their transmission projects so far. I am glad FERC gave a clear direction in this Order 1920. We must do more to increase the efficiency of the current transmission system. FERC rightfully noted that transmission owners have experience with technologies such as advanced power flow controllers.

FERC pointed to Entergy and Exelon, which are already using advanced power flow devices—another grid-enhancing technology.

FERC also said,

“We also disagree with commenters that argue that advanced power flow control devices are not appropriate in the transmission planning context and are more appropriate for operational timeframes.”

Economic Benefits through Reduced Congestion and Operational Costs

The economic implications of this rule are profound. By improving situational awareness and grid management, DLRs and advanced power flow control devices can significantly reduce congestion. This reduction leads to lower operational costs and fewer transmission outages, translating into substantial production cost savings. Moreover, these technologies increase the grid's capacity, allowing for more efficient energy transfers and reducing the need for costly infrastructure upgrades. The cost-effectiveness of these solutions makes them an attractive option for meeting the growing energy demands without incurring prohibitive expenses.

The cost of dynamic line ratings is approximately $22,000 per mile. [Source: https://www.energy.gov/oe/articles/dynamic-line-rating-report-congress-june-2019]

Promotion of Technological Innovation in Transmission Planning

FERC's directive to incorporate advanced technologies into transmission planning processes is a catalyst for innovation in the energy sector. By mandating the consideration of DLRs and advanced power flow control devices, FERC is encouraging transmission providers to adopt cutting-edge solutions that can enhance grid reliability and efficiency. This move not only drives technological advancements but also establishes a framework for continuous improvement and adaptation. As a result, the energy sector is poised to explore and implement innovative technologies that can further optimize grid performance.

It is well understood that transmission planners are very conservative in their study assumptions. For example, if a battery is connected at the same location as a solar farm, until recently, MISO and many transmission providers studied as if the battery output and the solar output were occurring at the same time. Which is unrealistic if you ask the battery developer or the solar developer. The battery exists to charge from the solar farm and discharges when there is a need for the transmission system.

It is unrealistic to assume that both the battery and solar export to the grid incur a transmission upgrade for the total amount. Or, assume that the battery will charge during peak demand. Planners make conservative assumptions like this. No, the battery charges during off-peak demand (summer off-peak case) and discharges during peak demand (summer peak case).

This faulty assumption is still applied to the distribution system. But since we are discussing FERC Order 1920, and FERC does not have any jurisdiction over distribution systems (the states do), the point of the conservative planning assumptions is that FERC is now mandating planners include new transmission technologies in planning. On that point, I applaud FERC, it is not 13 years late to the party.

What I am curious to see is what transmission owners will kick and scream before using these cutting-edge solutions and which owners embrace them. Utilities like AES and National Grid already realize the benefits of installing DLRs.

The bigger question is, in my mind, which transmission providers and regional transmission organizations have the backbone to stop what they are doing in transmission planning and start incorporating grid-enhancing technologies?

Conclusion

FERC Order No. 1920 is a groundbreaking regulation that addresses the critical need for a reliable and efficient power grid. By integrating dynamic line ratings and advanced power flow control devices into long-term regional transmission planning, this rule ensures a more resilient and economically viable energy infrastructure.

The adoption of these technologies offers immediate benefits, such as reduced congestion and operational costs, while also paving the way for continued innovation and improvement in transmission planning. As we move towards a future of increasing energy demands, the implementation of these advanced technologies is crucial for securing a sustainable and robust power grid.

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