Federal Energy Regulatory Commission (FERC) Order 1920 mandates long-term transmission planning over a 20-year time horizon to improve efficiencies in transmission investment and reduce ratepayer burden. Existing modeling frameworks may be adequate for short-term planning, but they are not appropriate for long-term transmission needs forecasts. This is because traditional models do not account for the interdependence of transmission, generation, and storage, which leads to inaccurate predictions over a longer planning period. To achieve just and reasonable rates, planners must adopt forecasting models that can guide cost-effective grid expansion decisions.
Our analysis (1) reviews the foundations of FERC’s legal authority to mandate long-term transmission planning; (2) explains why just and reasonable rates require incorporating modeling methods that account for the interdependence of transmission, generation, and storage; and (3) demonstrates that using a co-optimization model advances state policies while supporting state regulatory authority.