Outgoing FERC commissioner pushes long-term grid planning

Allison Clements is leaving her spot on the Federal Energy Regulatory Commission just six weeks after the release of the long-awaited Order 1920. After announcing earlier this year that she will not be seeking a second term, the upcoming June meeting will be her last. 

In the time she has left, Clements is urging grid operators to embrace the planning approach encouraged by the rule. 

• The top line: The 1,300-plus-page order, released in mid-May, is incentivizing the long-view. If all goes as planned, it could fuel the regional, long-term grid planning that past FERC rules have failed to yield, Clements said recently — and require grid operators to consider how the grid is projected to change.
• The nuts and bolts: Order 1920 is designed to prepare the grid for the renewable energy projects waiting to be connected. The order requires transmission operators to integrate long-term forecasts and cost analyses into their planning, and for those those plans to be revisited every five years. It aims to curb the interconnection backlog and curb grid congestion.

But Order 1920 isn’t precisely what Clements originally had in mind. As she outlined in an opinion piece for Utility Dive, she had envisioned a full overhaul of the commission’s policies, “by replacing them with a holistic process that brought local, regional and interregional planning under one umbrella,” with the goal of reworking a grid that “will increasingly fail to ensure affordable reliability.” 

But given the partisan divide of the commission, she agreed instead to a compromise that she believes comes with the problem of “preserving planning silos and slowing down the more transformative set of reforms.”

That said, the hope is that by encouraging grid operators to shift their perspective from present to future, the compromise rule avoids the foibles of past regulation.

In conversation with other grid stakeholders on a podcast from the law firm Norton Rose Fulbright, Clements explained that the results of past grid transmission regulations like the 2011 Order 1000 have fallen short of expectations in terms of reforming cost allocation and transmission planning processes.

“The reality is that we have 2.6 terawatts of generation in line to hook up to the grid. And 90-plus% of that is solar, wind, and storage,” Clements said. “The lack of robust regional planning means that the interconnection process itself has become an ill-suited place where the growth planning is taking place.”

Order 1920 is designed to change that.

“[The new FERC rule requires that operators] anticipate the future, so there shouldn’t be all of that kind of planning having to happen in the interconnection process,” Clements added, noting that retiring old facilities and adding new generation sources to the grid will be key to making the bigger “backbone” system work.

One side of the grid Rubik’s cube

If the rule succeeds, it would amount to a fundamental shift for grid operators. According to Rob Gramlich, president of Grid Strategies, long-term transmission planning simply isn’t happening. 

“The whole industry grew up out of 3,000 isolated utilities that could build stuff for their own footprint,” he said, speaking on the same podcast as Clements, adding that the industry “lost muscle memory” for how to effectively plan together. “We never really developed strong mechanisms to build lines that could cross a dozen or more utility footprints, and we’re still struggling with that.”

This is particularly obvious as the grid struggles with growing interconnection queues; on average only one of every five proposed renewable projects makes it to fruition. One consequence of the rule: it should help transmission operators “right-size” their facilities so that upgrades and replacements can happen faster. 

Clements’ colleague Willie Phillips, chair of FERC, echoed her urgency in bringing these planning reforms to fruition. He said in an appearance on Bloomberg News that the grid is currently “being tested in ways we have never seen before,” given extreme weather, growing demand, and a changing resource mix.

“We have to act now to plan for the future, because if we don’t, we doom the reliability of our system,” Phillips said. “If we don’t address it, we are facing a reliability crisis, absolutely.”

When it comes to figuring out who’s going to foot the bill, though, FERC is taking a more hands-off approach. 

“It's left up to the stakeholders in the region with a special seat at the table…to decide whether and which facilities to build — and who should pay for them,” Clements said, noting that analysis will help determine what the cost-effective solutions are for each regional grid. “That’s a big part of the rule as well.”

That said, the rule is just a first step: “only one part of a three-dimensional puzzle” that is grid planning, as Clements put it.

“It’s one row of this Rubik’s cube that keeps turning,” she said. ”How do you make the U.S. electricity system, the backbone of the modern U.S. economy, sufficient to protect customers and reliability in spite of all the changes taking place?”