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FERC tees up big transmission rule

May 13, 2024
a power pole surrounded by circles overlaid with legal symbols

Illustration: Tiffany Herring/Axios

The Federal Energy Regulatory Commission is about to finalize one of this decade's most important energy policies.

Why it matters: The final regional transmission rule, due out at FERC's meeting Monday, is one key that unlocks the grid of the future.

  • But it will likely get caught in a partisan debate that could make it difficult to take broader steps to decarbonize and keep up with mounting power demand.

Driving the news: The rule is expected to set up a process for planning regional transmission — moving electricity among states — that looks decades into the future.

  • It's an attempt to solve a problem that's plagued the grid since FERC's last big transmission reform in 2011: Although utilities spend a lot on transmission, most of that goes to small projects that don't expand capacity.
  • "I think the FERC rule is the most important energy policy in the country," said Rob Gramlich, president of Grid Strategies.

Friction point: FERC's proposal essentially sought to expand the definition of who benefits from — and therefore helps pay for — a transmission project.

  • That's one area to watch for any changes in the final rule, given that the makeup of the commission has changed — there's a new chair — since the proposal was circulated two years ago, said Steven Shparber, an energy lawyer at Mintz.

Yes, but: Today's rule "will not give a definitive prescriptive fix to most transmission issues," said Devin Hartman, R Street's energy and environmental policy director.

  • "It will most likely leave a lot of leeway to regional stakeholders to implement.… Folks should not fall in the trap of thinking regional transmission is going to get fixed after Monday," he said.

Dems will continue pushing for deeper policy overhauls, particularly on longer-distance interregional lines, which FERC only just begun addressing.

  • Much of the policy debate is about prodding the commission to do more with its current authority.
  • "I don't think there's anything that changes the need to push FERC to keep leaning in, to dictate some of the items on their agenda," Rep. Sean Casten told Axios.

Our thought bubble: The cost issue has caused the Hill debate about transmission to settle into a fossil fuels-vs.-renewables frame.

  • It partially reflects the fact that red states and owners of fossil assets don't want to pay for new renewables and the infrastructure they require.
  • "I'm concerned that they're just gonna try to socialize the cost of their fantasies to people who aren't benefiting from them," Sen. Kevin Cramer told Axios.
  • That dynamic complicates Democrats' ambitions to build off FERC's grid-related rulemakings. It means we'll likely see challenges to FERC's action from incumbent utilities.
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