On December 16, 2021, the Federal Energy Regulatory Commission (FERC) issued Order No. 881, its Final Rule announcing a new policy to guide transmission provider determination and use of transmission line ratings. The Final Rule requires transmission providers to implement ambient-adjusted ratings to measure the maximum transfer capability of their transmission lines for near-term transmission service. FERC determined that use of static ratings can cause transmission providers either to understate near-term transfer capability (leading to increased curtailments, interruptions, and congestion charges), or to overstate transfer capability (leading to reliability problems).

All transmission providers, inside and outside organized electricity markets, will be required to use the ambient-adjusted ratings for their transmission lines to evaluate requests for transmission service that will end within ten days of the request, and to use seasonal ratings for evaluating long-term requests for transmission services that will end more than ten days after the request.   

The Final Rule also requires regional transmission organizations and independent system operators to establish the systems and procedures needed to allow transmission owners to electronically update their transmission lines’ ratings at least hourly and to accommodate even more accurate ratings, such as dynamic line ratings, if transmission owners wish to implement them. Transmission providers also are required to use “uniquely” determined emergency ratings for operational contingency analyses and in post-contingency simulations of constraints.

The Final Rule also adopts a number of requirements intended to enhance transparency, increase situational awareness, and facilitate verification of transmission line rating accuracy. Transmission owners in regional transmission organizations and independent system operators will be required to share transmission line ratings and methodologies with their respective transmission providers and respective market monitors.  Transmission providers will be required to maintain a database of each transmission owner’s transmission line ratings and methodologies on a password-protected website.

The Notice of Proposed Rulemaking in this proceeding sought comment on whether to require transmission providers to implement dynamic line ratings, either across their entire systems or only on certain transmission lines for which dynamic ratings would provide the most benefit. Recognizing the additional costs of, and challenges in, implementation of dynamic line ratings, FERC did not impose a dynamic line rating requirement in the Final Rule, but established a separate proceeding (Docket No. AD22-5-000) to consider dynamic line rating issues further. 

Transmission providers are obliged to modify their tariffs to implement the Final Rule’s directives, with the compliance filings due on July 12, 2022.  Transmission providers will then have three years after the compliance filings are submitted to implement ambient-adjusted ratings and the other changes required by the Final Rule.

Please contact us if you have any questions or would like further information regarding the Final Rule, or other electric industry regulatory matters.