New FERC Proposal Prepares Transmission For Clean Energy Future

• An influx of clean energy throughout the country has posed issues for transmission providers; last December, 1,300 GW of clean energy was in storage waiting for transmission.

• A new rule proposed by FERC would mandate transmission providers consider how the energy landscape would look 20 years into the future, which will assist in anticipating future needs. 

• The rule proposal is expected to deliver more renewable energy to consumers while keeping electric costs down. 

The transition to clean energy is well underway. This is particularly evident in Virginia, where solar facilities produced more electricity than coal did for the first time ever in 2021. Thanks to forward-looking state law and supportive localities, coal plants in Virginia generated 3,130 GWh of electricity last year, while solar facilities generated 3,365 GWh. Solar is on the rise in Virginia as the sun sets on coal; only three coal-fired plants in the state remain in operation, with one currently slated for retirement.

And as we covered last week, federal policy is also beginning to embrace a clean energy future. Issued in 2020, FERC Order 2222 aims to modernize the nation’s electric grid by permitting distributed energy resources such as solar and wind facilities to participate in regional wholesale electric markets. This will allow for not only a more resilient electric grid throughout the country, but also keep the cost of energy for consumers down thanks to increased competition. PJM, which operates the grid in Virginia as well as 12 other states and D.C., submitted its Order 2222 compliance proposal to FERC earlier this year, which includes plans to begin integrating distributed energy resources into the market by 2026. 

Last week, FERC released a new rule proposal that acknowledges the increasing prevalence of renewables throughout the country and seeks to address issues in the transmission of renewable energy from source to consumer. 

Under the proposed rule, transmission providers would be required to consider how the energy landscape will look at least 20 years in the future. The mandate to consider transmission needs over such a long period of time will give transmission providers the opportunity to study and understand how transmission needs will change as states like Virginia look to eliminate carbon emissions within decades. Transmission providers will also be required to consider how energy needs will change over 20 years; the adoption of electric vehicles, for example, will change the way electricity is used throughout the country. Transmission lines will have to adapt in order to meet these needs, and FERC’s proposed rule will help to anticipate changing needs. 

Similar to Order 2222, FERC’s new proposed rule will likely help to improve the resilience of America’s electric grid while bringing down energy costs for consumers. The rule is also expected to facilitate new investment in transmission if approved. 

Current transmission infrastructure throughout the United States has not been able to support an influx of renewable energy or increasing electrification. At the end of last year, about 1,300 GW of energy generated by solar and wind facilities was sitting in storage awaiting transmission nationally. About 250 GW of renewable energy was backlogged in PJM territory. FERC’s proposed rule seeks to clear this backlog, enabling clean energy to make its way to consumers.
The new proposed rule came during the first in-person FERC meeting since February 2020. Following publication of the proposed rule in the Federal Register, public comment will be open for 75 days. FERC is expected to finalize the rule by the end of the year.