It’s been a dizzying month of headlines about extreme weather around the world, and it is almost certain that this month we’re in will go down as the hottest month in recorded history. Here at FERC, we are grateful to the grid operators and market participants who have so far managed this month’s heat challenges remarkably well. It is in this context that I am so pleased we are finalizing this rule. I will save my praise for the Staff team, the Chairman and his team, and my team after the presentation in E-1.
One critical aspect of grid operations that escapes no energy policy conversation these days is resource adequacy. As at least PJM, MISO and CAISO have made clear in their recent assessments, removing barriers and accelerating resource additions to the grid are one of the central tenants of their concerns of ensuring resource adequacy. While we will not be replacing retiring thermal units on a 1:1 basis with solar and wind, getting these resources online is critical in the face of a changing resource mix and these extreme weather challenges.
I also want to highlight some takeaways from the Federal-State Joint Task Force meeting we held in Austin last week, which focused on grid-enhancing technologies (GETs), a topic that was once relegated to small windowless conference rooms full of energy grid geeks. Now it’s relegated to big windowless conference rooms like this one — and is front of mind for regulators across the country.
State colleagues mentioned a recent Grid Strategies report estimating last year’s congestion costs across the country to be $20.8 billion, an increase of over $14 billion since 2020. The Brattle Group recently found that using some set of GETs to unlock additional capacity on the grid would save customers $8.3 billion dollars. If you think this number is optimistic, discount it. Cut it in half! It’s still 4+ billion dollars. GETs will be a win for customers, and states are taking notice.
At the meeting, one persistent fear many of us challenged is the notion that GETs are scary, new, or untested. My team and I had fun brainstorming technology that came after some of the early GETs, like the floppy disk and the Walkman. Today, utilities around the world have proven experience and results.
I came away with the sense that the regulators, as a group, are open to more systematic deployment of these GETs solutions and I look forward to working with them. Today will be one of those good days for these technologies when we get to E-1.
E-1 | Final Rule
First, let me commend and congratulate Chairman Philips for prioritizing this issue on day 1, which as he said he couldn’t do without Karin Herzfeld. She has done a wonderful job. I also want to thank my team, with Kris Fitzpatrick leading our team’s efforts. Second, I too would like to congratulate the large team of staff who have succeeded in what was a near-impossible task – to review and analyze thousands of pages of comments on a broad set of interconnection-related issues in a short period of time. Staff has been working nights and weekends for months, their families and friends have been subjected to interconnection policy discussions at the dinner table, their toddlers know what a network upgrade is, their cats love heat maps, and they dream of proportional impacts. Most importantly, they have made sacrifices to get this done and are likely very tired. And they deserve our thanks. You made it! My sincere thanks to all of you involved in this rule, may you have a very, very long weekend.
I am happy to enthusiastically support this final rule to help clear out overloaded interconnection queues. You’ve heard about the immensity of the challenge, and it feels nice to start to be a part of the solution. The rule provides a strong baseline, based on best practices and lessons learned from around the country, to ensure all utilities are making strides towards breaking through their own interconnection log jams. I want to highlight just a few of my own perspectives on this rule.
First, it’s fair. The final rule requires everyone to do their part to address the causes of interconnection backlogs. The rule imposes strong new requirements on interconnecting generation and accountability on the utilities whose job it is to get the studies and interconnections done in a timely manner. These groups have a shared responsibility—and a shared interest—in achieving an efficient and effective process, and this rule reflects that.
Second, we listened. While the general framework and issues of concern have not changed, we have made some significant modifications to our starting proposal to incorporate stakeholder feedback.
Third, it’s a great start for grid-enhancing technologies, or as the rule calls them, alternative transmission technologies. I’m going to list them — I’m serious: static synchronous compensators, static VAR compensators, advanced power flow control devices, transmission switching, synchronous condensers, voltage source converters, advanced conductors, and tower lifting. We put all these things in the rule for transmission providers to consider.
The rule’s requirement sets only a low bar: “evaluation” of these technologies. I encourage utilities and grid operators to embrace the opportunity this rule provides, learn more about how to grow your consideration and deployment of these grid-enhancing technologies, and share your learning with your neighbors. And fellow regulators, I encourage you to pay close attention as we go.
I also want to speak briefly about my concurrence. It is worth noting that no matter the challenges this Commission is tasked with addressing—whether it’s regional or interregional planning, market design, or in this case interconnection—these are multi-faceted, complex endeavors. None of them can be solved by one rule, no matter how ambitious that rule may be. One benefit of building such a robust record in this docket is that we have a better understanding of what’s left on the interconnection horizon.
My concurrence outlines several topics that I believe are ripe for further consideration and development based on stakeholder feedback—some as additional nuts and bolts improvements and others as potential areas for deeper reform that we didn’t learn about until going through the record in this process. I am eager to continue engaging on these topics. Once again, I want to congratulate the Staff and Chairman on a good day.