FERC to overhaul US electric transmission system


By Valerie Volcovici

WASHINGTON (Reuters) – The Federal Energy Regulatory Commission is expected to issue a final rule on Monday that could set new requirements for moving electricity across states and covering the costs of new transmission projects – which will play a key role in the Biden administration’s goal of decarbonizing the economy by 2050.

The FERC’s rule on regional transmission planning and cost allocation has been under development for nearly two years. It is meant to ensure the U.S. power grid is resilient and able to deliver reliable clean electricity to meet growing U.S. demand amid the explosion of electric vehicles, data centers and artificial intelligence.

President Joe Biden’s administration has a goal of a carbon-free power sector by 2035, in order to fight climate change. To meet that target, the country needs to more than double regional transmission capacity and expand interregional transmission capacity more than fivefold, a U.S. Department of Energy study said in November.

At Monday’s FERC meeting, commissioners will unveil and vote on the final rule.

The rule is expected to require that utilities, transmission providers and state energy policymakers carry out long-term planning to ensure there is enough transmission to bring new generation online for the first time.

“Unfortunately very few utilities or regions have been doing that planning and all the new demand and supply trying to connect to the grid is being stifled. This rule will help fix that,” said Rob Gramlich, president of transmission consulting firm Grid Strategies.

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Boosted by tax incentives in Biden’s 2022 Inflation Reduction Act, the queue of power generation projects awaiting a connection to the electric grid is currently around 2,600 gigawatts, twice the amount of generation of the current U.S. power plant fleet.