Explainer on the Transmission Planning and Cost Allocation Final Rule

Key metadata

Document number

ferc-order-1920-explainer

Type

Explainer

Publication date

2024-11-21

Agencies

Energy Department, Federal Energy Regulatory Commission

CFR references

18 CFR part 35

Original source

FERC explainer page

FERC Transmission Planning Reforms: Order No. 1920-B Issued April 11, 2025 (US)

On April 11, 2025, the Federal Energy Regulatory Commission (FERC) issued Order No. 1920-B, a second rehearing order related to its landmark reforms for regional electric transmission planning and cost allocation. This latest order follows the original Order No. 1920 (May 2024) and Order No. 1920-A (November 2024), which together establish new requirements for how transmission providers plan and pay for long-term regional transmission facilities.

Why it matters

These orders fundamentally change how new transmission lines are planned and funded across different regions. Key reforms include: Long-Term Planning: Mandates a forward-looking approach to identify and build transmission needed for future energy needs, including the integration of new clean energy resources like large-scale battery storage. Improved Transparency: Requires more open and transparent planning processes, allowing stakeholders to better understand and participate in transmission development decisions. Amplified State Role: Strengthens the involvement of states in regional transmission planning and cost allocation decisions, including requiring state consultation before any changes to cost allocation methods. For battery storage and grid infrastructure, these reforms are critical. By streamlining and improving transmission planning, FERC aims to reduce interconnection queues, facilitate the deployment of new clean energy projects (including utility-scale battery storage), and enhance grid reliability and resilience. Better planning and clearer cost allocation can accelerate the build-out of necessary infrastructure to support a modern, decarbonized grid.

Who is affected

Transmission providers, regional transmission organizations (RTOs)/independent system operators (ISOs), states, and all stakeholders involved in developing and operating grid infrastructure, including battery storage developers, clean energy project developers, and large energy consumers.

Key timing

Order No. 1920-B was issued on April 11, 2025. This order clarifies and modifies previous requirements, and while it is a rehearing order, the provided text does not indicate a new public comment deadline for this specific issuance.