Bridging the Gap: New England’s transmission planning and Order 1920

Transmission lines can carry electricity over long distances, delivering power across the U.S. and keeping the lights on. The electricity grid is changing, and we need to plan for new transmission that will meet the needs of the future, where clean energy will provide most of the power to meet growing demand. Long-term transmission planning is the process of evaluating future transmission needs and is essential to build a cost-effective grid that can support the clean energy transition. This past May, ISO New England (ISO-NE) took a major step forward when the Federal Energy Regulatory Commission (FERC) approved its Longer-Term Transmission Planning Process (LTTP). The LTTP is a monumental step forward, demonstrating the region’s commitment to building a future-ready grid. If all goes to plan, it will soon result in the construction of new, urgently needed transmission lines.

Just four days after ISO-NE filed its proposal for FERC approval, FERC issued its long-anticipated Order 1920. Order 1920 mandates that all planning regions implement a regular long-term transmission planning process. Grid planning entities, such as ISO-NE, now have until June 2025 to develop and align their processes to meet the requirements set forth in Order 1920.

Although the LTTP closely aligns with Order 1920, there are still some key differences, as NRDC, Acadia Center, and other partners highlighted in joint comments to FERC. This blog will explore and clarify these distinctions. ISO-NE and stakeholders in the New England region should leverage the LTTP to deliver transmission benefits in the near term while evolving toward a more robust long-term framework under FERC Order 1920, providing significant and lasting rewards for consumers and the climate.

Planning cycles

The first key difference between LTTP and Order 1920 lies in the regularity of the planning cycles. Order 1920 mandates that transmission providers conduct Long-Term Regional Transmission Planning at fixed five-year intervals. In contrast, ISO-NE’s current process is initiated only at the request of the New England States Committee on Electricity (NESCOE), which represents the collective perspective of the New England Governors. The LTTP planning horizon goes out to 2050. To comply with Order 1920, ISO-NE will need to establish a planning process that operates automatically at least every five years, independent of stakeholder requests, and incorporates a 20-year planning horizon. The planning intervals and horizon are critical given the fast pace of technological change and market conditions as well as the long timeframe for developing new transmission infrastructure.

In addition to having the authority to initiate the LTTP process, NESCOE also has the authority to terminate it. To comply with Order 1920, however, the planning process cannot be terminated at the request of the states. While the process must remain ongoing once initiated, it must also incorporate robust state input throughout.

Scenario planning

The future of the power system is uncertain, influenced by various factors such as projected demand, extreme weather events, the integration of more clean energy, and the retirement of fossil fuel resources. To address this uncertainty, Order 1920 requires grid planners to consider at least three plausible and diverse future “scenarios.” These scenarios must account for seven key inputs, the first three of which are mandatory and cannot be discounted.

ISO-NE’s transmission planning process consists of two key parts. The first part is triggered when NESCOE requests a “Longer Term Transmission Study” to assess the future needs of the power grid. While ISO-NE’s initial transmission study, released in early 2024, is a strong example of planning for uncertainty, future studies should incorporate at least three scenarios, utilizing the essential inputs mentioned earlier. Additionally, these studies should be shaped by robust stakeholder engagement to ensure that the inputs are well-informed and comprehensive.

Furthermore, Order 1920 mandates that each scenario includes an “extreme weather sensitivity” to ensure the grid’s resilience against climate-induced extreme weather events, such as severe winter storms. To comply with Order 1920, ISO-NE could leverage an existing model to develop extreme weather scenarios—the Probabilistic Energy Adequacy Tool—which can assess the risk of extreme weather events.

Benefits analysis

Once scenarios are developed, grid planning regions must evaluate potential transmission solutions. Order 1920 requires potential projects to be evaluated against seven “benefits,” which are detailed below. This process ensures that the final selected projects will provide the most comprehensive benefits to the region.

ISO-NE’s LTTP takes into account five key benefits, most of which align with those required by Order 1920. However, due to some combinations and overlap, there is one crucial benefit from Order 1920 that is missing and must be incorporated into ISO-NE’s process: the “mitigation of extreme weather and unexpected system conditions.” The table below provides a simple overview of these benefit categories. For a more nuanced side-by-side comparison of how the benefits in LTTP and Order 1920 correspond, a detailed table is available here.

Project selection

After transmission solutions are evaluated using the seven benefits, the ISO selects a final project or portfolio of projects to move forward. Under LTTP, any project that meets a 1 to 1 benefit-to-cost ratio may be selected.  Order 1920 allows transmission providers to use a benefit-to-cost ratio as high as 1.25 to 1 to determine whether the benefits of a project outweigh the cost. LTTP’s benefit-to-cost ratio is compliant with Order 1920, ensuring that benefits will always be commensurate with costs and may even outweigh costs.

Second, under LTTP, NESCOE holds the authority to make the final decision on which projects that meet this threshold are selected and built. It can decide that a project that meets the 1 to 1 benefit-to-cost ratio should not be included in the transmission plan. This decision-making role reflects the strong leadership the New England states have demonstrated in public policy transmission planning. Similar to LTTP, Order 1920 does not mandate that projects that meet the benefit-to-cost ration be selected. However, a key difference is that Order 1920 allows transmission providers—such as ISO-NE (under the terminology of the Order)—the ultimate authority to select transmission projects.

Advanced transmission technologies

Order 1920 mandates that planning regions consider the use of “advanced transmission technologies,” which are innovations designed to enhance the efficiency and capacity of the grid. These technologies often involve upgrades to existing infrastructure, such as replacing older transmission lines with ones capable of carrying more power. LTTP does not have an explicit process to evaluate advanced transmission technologies. To comply with Order 1920, ISO-NE should develop a process to assess whether incorporating advanced transmission technologies into a project would be more cost-effective or efficient.

Cost allocation

Order 1920 resolves a long-standing question: who pays for transmission? Order 1920 requires transmission providers to include one or more “default” cost allocation methods for transmission projects that are selected. It also permits a subset of states to agree to pay for all of part of a transmission project if an agreement is struck.

One of the major breakthroughs of LTTP is the coordination among NESCOE states on cost allocation. By default, the costs of any project that is selected in LTTP are allocated across the region based on load. Additionally, LTTP includes a mechanism that allows states to voluntarily cover excess costs for projects that provide greater benefits to their state compared to others. LTTP meets the requirements of Order 1920 on cost allocation, and should inform Order 1920 compliance.

Stakeholder engagement

ISO-NE plays a crucial role in facilitating meaningful stakeholder engagement in transmission planning. While Order 1920 mandates stakeholder review of planning assumptions, transmission needs, and potential solutions, these requirements should be viewed as a minimum standard.

ISO-NE’s LTTP engages with stakeholders, but only those who are members of the New England Power Pool (NEPOOL), which is made up of generation owners, transmission owners, consumer advocates, and state officials. NEPOOL meetings are not open to the broader public. Long-term regional transmission projects will affect all of New England, not just NEPOOL members. Therefore, it is essential that all transmission planning meetings be open to the public, with materials presented in plain language to ensure meaningful engagement. ISO-NE’s Order 1920 planning process should also prioritize outreach to municipalities and local governments, as they play a critical role in permitting, environmental justice, and the development and enforcement of local laws and regulations.

Conclusion

New England’s LTTP has established a solid foundation for the region’s clean energy future. The upcoming months present exciting opportunities to implement this new process and identify and potentially select new public policy transmission solutions that will benefit the region. However, it is also crucial for ISO-NE to fully comply with Order 1920 to guarantee a resilient, clean, and affordable energy grid that will serve generations to come. LTTP is a solid foundation on which to build ISO-NE’s Order 1920 compliance. We look forward to collaborating with the New England States, ISO-NE, NEPOOL members, and other stakeholders to begin realizing this long-term vision now.