Conservative Energy Network Encouraged by FERC Ruling on Planning and Cost Allocation

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May 13, 2024 – LANSING, Mich. – The Conservative Energy Network (CEN) is encouraged by the release of Order 1920 earlier today by the Federal Energy Regulatory Commission (FERC). The rule is FERC’s first major update to transmission planning policies in over a decade and comes as power demand is surging across the country.

The rule will yield better transmission planning processes. These improvements will serve to better inform decision-making processes at the regional and state levels by outlining a more standardized and longer-term study of where, when, and how the power grid can be updated to best meet the needs of consumers. This rule will also encourage grid innovation by requiring transmission providers to consider a broad suite of advanced transmission technologies that will drive down ratepayer costs.  

Furthermore, the rule respects appropriate state control over new transmission projects. The rule explicitly follows a “beneficiary pays” cost allocation system. Simply put, if a state’s consumers do not benefit from a transmission line, they will not be expected to pay.

“Long-term transmission planning will enable American energy independence and lead to a more secure and reliable grid. Today’s ruling is a major step toward expanding, integrating, and modernizing America’s power grid to improve its security, reliability, and affordability,” said CEN CEO John Szoka. “It is clear that there is agreement across party lines that reform to existing transmission planning and cost allocation is necessary. We look forward to working with policy makers and decision makers across the country as this ruling is implemented.”

Well-planned transmission projects can add up to $42 billion to the national GDP, boost direct local spending by nearly $39 billion, and create more than a million new jobs. Previous polling from CEN has found that more than 60% of voters believe a modern power grid would increase American jobs, reliability, and national security. 73% of voters agree that a modern power grid is necessary to maintain life in the 21st Century.

CEN will host a free webinar to discuss the impact of today’s ruling on Wednesday, May 22, 2024 at 1:00 PM ET. Registration is available here.