FERC is about to make some very important decisions about transmission

The Federal Energy Regulatory Commission (FERC) is poised to pass new policy that will expand regional transmission capacity, but how impactful will its new rule be? In this episode, grid policy expert Rob Gramlich gives the lay of the land.

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David Roberts

By now, it’s fairly well understood that the US badly needs more electricity transmission lines to keep up with the changing generation mix and growth in demand that will come with clean electrification. But new lines, especially the much-needed longer-distance regional lines, are being built at a snail’s pace. If the US is to hit its mid-century climate goals, transmission capacity expansion must radically accelerate.

Congress helped a little with money in the infrastructure bill, and the Biden administration helped by establishing a Grid Deployment Office inside the Department of Energy, but arguably the biggest opportunity for progress comes in the form of an upcoming rule by the Federal Energy Regulatory Commission (FERC).

It will beef up the commission’s existing rules on regional transmission planning, but exactly how much it will strengthen them depends on the final rule, expected early next year. Transmission advocates are urging FERC to pass a rule with reel teeth — including Senate Majority Leader Chuck Schumer, who sent the commission a letter with encouragement and suggestions in July.

Nobody knows more about grid policy than Rob Gramlich, founder and president of Grid Strategies, a policy analysis and strategy firm. He is executive director of the WATT Coalition, co-founded and used to run Americans for a Clean Energy Grid, serves as a board advisor to a half-dozen other groups, and has a long history in the industry, including a stint at FERC in the early 2000s.

I talked with Rob about the current state of affairs in transmission policy, the scope of FERC’s authority, and the details that matter in the coming rule. Don’t let the technical-sounding subject scare you off — this was a fun one, and incredibly clarifying.

Okay then, with no further ado, Rob Gramlich. Welcome to Volts. Thank you so much for coming.

Rob Gramlich

Thanks, David. Great to be here.

David Roberts

I am excited to talk about this. I know that perhaps FERC is not at the top of people's mind when they think about excitement and thrills, but I think people will see by the end of this why this is a very good time to tune in to what FERC's doing. So let's start here. I think we can assume for the purposes of this pod that Volts listeners understand the need for more transmission, specifically the need for more long-distance transmission for a bunch of reasons. We know that the resource mix is changing. We care more about renewables now.

They're located in different places. They're located not necessarily next to load. They're remote. We're going to double or triple the amount of electricity we're using in the coming years, because we're electrifying everything. So we need more transmission for that reason. We know that connecting up a wider geographical area makes the whole system more reliable, makes the whole system cheaper. Transmission is the wonder tool of energy. It makes everything better, and yet we are not building it. So back in the late 90s, FERC, the Federal Energy Regulatory Commission, which has jurisdiction over interstate transmission, released a series of orders.

So in the beginning, there were, just across the nation, just dozens and dozens of individual vertically integrated utilities, all of which were building their own transmission, more or less for their own areas. And so back in the late 90s, FERC saw this and many other people saw the need for more interregional transmission and issued a series of orders trying to kind of nudge things in that direction, doing, among other things, they created regional transmission operators and independent system operators, RTOs and ISOs, which were supposed to be regional organizations that did regional transmission planning. And there were others too, I think, going all the way up to 2011, there were other orders, basically like, "please friggin utilities, get together and start doing some planning, do some interregional planning." And yet, despite this series of orders, and despite the existence now of RTOs, we're still not building interregional transmission.

I mean, we're building it at a snail's pace and not necessarily where we need it, and certainly nothing close to the pace we need to be building at. So maybe let's just start here. Why, given the existence of RTOs, which are explicitly supposed to do this, is there still not adequate regional transportation planning? Maybe you could run through the three P's here. That's going to help kind of set us up for what's to come.

Rob Gramlich

Sure. Well, first of all, thanks for your help in communicating all that. So let's stipulate that the need for transmission is understood. And that's great that it is, because a few years ago it wasn't. But you've been helpful.

David Roberts

It does seem like that at least has sunk in, in the wider world.

Rob Gramlich

I think that's right. And of course, in recent years, it's been more sort of the climate-focused policymakers and community who have understood this, which is great, as they should, for the incredible clean energy need for transmission and climate benefit. But just suffice to say, it wasn't always such a democratically tilted issue. But that's a separate conversation we could get into. But, yeah, FERC has been, in the 90s, the early 2000s, had orders trying to beg, plead and borrow the industry to get going on regional transmission. And in fact, it goes even way back. I mean, the 1935 Federal Power Act itself has some language about the voluntary, encouraging the voluntary coordination of the systems.

And then there were actions in the pre-war and wartime to be able to produce the military assets and airplanes and everything by — we needed to increase the production basically out of the electric industry.

David Roberts

Yeah, it's a bummer. We decided to build this interstate road network basically for security purposes around then, and did not decide at the same time to do the same thing for transmission. It would have been a good move on our part.

Rob Gramlich

That's right. But there were actions by the predecessor to FERC, the Federal Power Commission, during those same years, though, trying to strengthen the connections, but it only went so far. And then it was really when the electric industry tried to restructure to get generation competition in the 90s that it started pushing harder. There was a 1993 regional transmission group RTG policy statement, and then they said, well, that's not enough. And then they had Order 888 for open access transmission. That included a push for voluntary creation of independent system operators. That's where that term really came into practice.

It was encouraged and voluntary. And then the commission tried in 1999 to require participation in the regio