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Alex Boyd
In May 2024, FERC announced a long-awaited plan to accommodate the increasing electricity demand and to facilitate the integration of clean energy projects into the grid.
According to Alex Boyd, CEO of PSC Consulting, “FERC’s Order No. 1920 is a significant step forward in US transmission planning. The rule mandates a 20-year regional planning horizon, introducing ‘right-sizing for optimized infrastructure and aligning cost allocation with global standards. It addresses the fragmentation in inter-utility collaboration, facilitates renewable energy integration, and enhances grid resilience. The rule emphasizes rigorous cost-benefit analysis, state involvement, and the use of advanced grid technologies, paving the way for a reliable and sustainable energy future.”.
The rule’s introduction of ‘right-sizing’ is a critical advancement, ensuring that transmission infrastructure is optimized to accommodate projected power flows and facilitate efficient energy transfer across jurisdictions. This is particularly vital as we incorporate offshore wind and remote solar resources, which often generate power far from load centers.
The emphasis on rigorous cost-benefit analysis and pre-approval mechanisms brings US practices in line with global standards seen in Europe and Australia. These measures are designed to streamline project justifications, reducing delays and ensuring that infrastructure investments are aligned with long-term goals of grid reliability and resilience.
The holistic planning approach mandated by Order No. 1920 shifts from a piecemeal strategy to a comprehensive, long-term vision. This is essential for the evolving power landscape, where decarbonization goals require coordinated investments across multiple jurisdictions and utility service areas.
Order No. 1920 also addresses gaps left by Order No. 1000, providing a clear and structured framework for the approval and cost allocation of cross-border transmission projects. This is a significant advancement for enhancing the robustness and adaptability of the national transmission network, ensuring it can meet future demands.
The rule mandates a robust evaluation process involving at least three diverse scenarios for long-term planning, applying seven specific benefits to determine cost-effectiveness. It also emphasizes the role of grid-enhancing technologies, such as dynamic line ratings and advanced power flow control devices, to improve operational efficiency.
Additionally, the rule strengthens state involvement throughout the planning, selection, and cost allocation processes, ensuring customers only pay for projects they benefit from. This state engagement is pivotal for securing approval and funding, facilitating smoother implementation of long-term regional transmission facilities.
PSC wholeheartedly supports FERC’s mandate for long-term, integrated system planning. Such ‘master planning’ is essential for optimizing grid infrastructure to support higher renewable penetration and ensuring sustainable, reliable energy delivery nationwide. By providing utilities with the necessary tools and methodologies to justify and implement these investments, Order No. 1920 paves the way for a more resilient and forward-looking electric grid.
Alex Boyd is the President and CEO of PSC Consulting. Alex has over 25 years of engineering and management experience in the electricity industry around the world. Learn more at pscconsulting.com.
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