The Future of Transmission Reform and FERC Order 1920

Featuring

[Moderator] Alexandra Perez, Manager, Federal Government Affairs, R Street Institute

Devin Hartman, Policy Director, Energy and Environment, R Street Institute

Overview

Despite the excessive cost of U.S. transmission expansion, it is still not keeping pace with growing needs, especially with resurgent load growth. The most prominent reform to address this issue came in May, when the Federal Energy Regulatory Commission (FERC) issued Order 1920 to overhaul transmission planning and cost allocation. It was approved 2-1 with a spirited dissent from Commissioner Mark Christie, who said he would have voted for it had the role of states to protect consumers been more prominent. The reaction from states has been mixed. Consumer groups have generally come out in support of the core of Order 1920’s reforms, including in congressional testimony, but in opposition to its anticompetitive provision. On balance, Order 1920 should yield major positive net benefits for consumers without eroding meaningful state autonomy. The impact of the order hinges on implementation quality, litigation outcomes, and complementary reforms. R Street has independently analyzed and worked with states and consumer groups on Order 1920 reforms and other transmission policies before FERC and Congress. A key question is how Congress can pave a bipartisan transmission reform path to lower costs, improve reliability, and yield environmental improvement.