FERC’s landmark transmission planning order – Order No. 1920 – will require changes to how America builds up its transmission system, the backbone of our electric grid. Fundamental to this new process will be a formalized role for states in deciding how transmission lines are planned and paid for. The ruling has the potential to transform our system by encouraging cooperation and prioritizing system reliability and affordability. Getting it right will require a new approach by many stakeholders, and will especially require robust state engagement. 

Advanced Energy United seeks to ensure FERC Order No. 1920 meets its potential. As Transmission Director at United, I’ve been seeking opportunities to showcase for decision-makers and other stakeholders how states can leverage FERC’s new rules to secure a more reliable and affordable transmission grid. With this objective in mind, I recently moderated a webinar for Advanced Energy United that we called Navigating State Dynamics of FERC's Transmission Order. 

On the webinar we welcomed: 

• Maury Galbraith, Executive Director of the Colorado Electric Transmission Authority (CETA) 
• Dan Scripps, Chair of the Michigan Public Service Commission (MPSC) 
• Suzanne Glatz, Principal Consultant at Glatz Energy Consulting LLC. 

The discussion began with a short presentation from Suzanne Glatz, a former infrastructure planner at the grid operator PJM. Glatz called this rule a “major change” from today’s process, not only because of what it’s asking the transmission providers to do, but for “all of the opportunity, and really, encouragement, by FERC for states to engage in the process” of developing transmission planning processes, as well as implementing them. Glatz also pointed to cost allocation – how it is decided who pays for what – is also going to undergo a major change, saying FERC “is very explicit in inviting the states to participate in the development” of the cost allocation methodology. 

State involvement could be the difference between an effective change to how transmission is planned and paid for, versus an ineffective one. Maury Galbraith of CETA warned that FERC’s previous transmission order, Order No. 1000, failed to deliver on its promise in part because utilities and grid operators used its requirements as a “ceiling” instead of a “floor,” creating a “straightjacket” to doing innovative transmission planning. If states are going to be one of the mechanisms to making sure utilities and grid operators apply the proper amount of ambition to creating new transmission planning processes, said Galbraith, state leaders and utility regulators are going to need to prioritize this issue, and dedicate time and resources to engagement. 

One area where this appears to be happening as intended already is at the Midcontinent Independent System Operator (MISO). Scripps of Michigan’s Public Service Commission says the process has become a model because it has “very active involvement from the states,” that it was the states themselves that first came to MISO with a request for change: “The system is changing, the energy transition is happening, transmission has got to be a part of it. You need to do better in terms of the planning process for long range transmission,” Scripps summarized. That call for action by the states prompted MISO to change its processes, said Scripps, and since then, that “buy in” from states and participation from states led to a better process. 

Critically, there had to be agreement on a basic principle: states that don’t benefit from a transmission line won’t have to pay for it, but that the inverse also needs to be true: “The problem is, there are a lot of people who benefit, who don't want to pay even for the benefits that they receive,” said Scripps on the webinar. “And if you give them a veto over the whole process, transmission just doesn't get built.” 

On the webinar, the panel discussed some of the specific arrangements that different regions are using to try to get transmission built, including “state agreement approaches,” and discussed how states and transmission operators can and should quantify different kinds of benefits that don’t intrinsically have a dollar value.  

To navigate those differing opinions, Scripps pointed to the need for compromise in order to obtain a greater good. Maury Galbraith agreed, saying that if states are able to work together, they’ll be in a much better position to get what they need from grid operators: “The state voice is stronger when they speak as a group, or speak as a region right? So I would hope that in the West... that the states will make a real hard effort to achieve some level of consensus on making recommendations in a single compliance.” 

“And it's not easy, right?” said Galbraith. “The states have divergent views. They're not always similarly situated. So it's tough to achieve consensus, but their voice will be a much stronger voice if they're able to speak as one as opposed to in in the West, having 11 different state perspectives. So that would be my hope. And I'm certain that the regulators in the West are thinking in those terms and working to try and identify those commonalities.” 

The entire webinar is available to watch on demand.