CRA Insights

Key insights into FERC orders 1920 and 1977

May 22, 2024
Charles River Associates offshore wind farm sunset

CRA’s Energy practice recognizes the transformative impact of FERC Orders 1920 and 1977 on transmission planning. This order mandates a comprehensive review of seven benefits over a 20-year horizon when evaluating transmission projects, using multiple scenarios and the best available data, adding complexity and depth to the process. Despite the challenges, the Orders’ requirements present opportunities for optimizing transmission infrastructure and cost allocation. Additionally, as FERC has declined to reinstate the federal ROFR, state laws will continue to shape the landscape for transmission providers. The requirement for ISOs to evaluate local transmission projects for potential “right-sizing” could provide further opportunity for incumbent utilities.

In this report, learn how CRA’s Energy experts are preparing to navigate these regulatory changes, ensuring efficient and effective transmission planning.

Key Takeaways
FERC Order 1920:

  • FERC requires transmission planners to consider a comprehensive set of seven benefits when evaluating transmission facilities. However, practical implementation of these benefits may be challenging and time consuming.
  • FERC requires more extensive transmission planning: using a long-term horizon (20 years), updated at least every five years, and evaluated across at least three plausible scenarios using the ‘best available data.’
  • FERC declines to reinstate the federal transmission ROFR (Right of First Refusal). Therefore, states will continue to determine their own ROFR laws.
  • ISO (Independent System Operator) requirements to evaluate local transmission plans for right-sizing potential will likely lead to more opportunity for incumbent utilities to build transmission.

FERC Order 1977:

  • FERC serves as the backstop transmission siting authority for DOE-designated NIETCs (National Interest Electric Transmission Corridors).
  • Transmission siting applications require early engagement with four stakeholder groups: affected landowners, environmental justice communities, tribal communities, and local communities.

FERC Orders Overview
On May 13, 2024, FERC issued two orders addressing long-term, regional transmission planning. Order 1920 is the first major transmission ruling in over a decade, since FERC’s Order 1000 in 2011.
FERC Orders Overview

FERC Order 1920
Rules on cost allocation and regional transmission planning policies proposed in FERC’s 2022 NOPR. Sets requirements to establish long-term regional reliability.
FERC Order 1977
Amends permitting regulations for siting electric transmission facilities to ensure consistency with amendments in the Infrastructure Investment & Jobs Act and Federal Power Act.

Read the full report here