FERC Order 1920-B: Transforming Long-Term Regional Transmission Planning in the United States

Introduction

The U.S. electric grid is undergoing one of the most significant transitions in its history. The rapid growth of renewable energy, electrification of transportation and industry, and increasing extreme weather events are placing unprecedented demands on transmission infrastructure.

To address these challenges, the Federal Energy Regulatory Commission (FERC) issued Order No. 1920, followed by Order No. 1920-A and Order No. 1920-B, establishing sweeping reforms to regional transmission planning and cost allocation across the United States.

These reforms require transmission providers to perform long-term regional transmission planning that anticipates grid needs decades into the future, ensuring that transmission expansion is efficient, cost-effective, and aligned with evolving energy policies. 



For utilities, developers, and grid operators, understanding these reforms is critical. Engineering firms like Keentel Engineering play an essential role in helping stakeholders navigate these regulatory changes through power system studies, transmission planning, and compliance support.

Why FERC Order 1920 Was Needed

Historically, transmission planning processes focused primarily on near-term reliability needs rather than long-term system evolution.

FERC determined that existing planning frameworks were insufficient because they did not:

• Conduct sufficiently long-term assessments of transmission needs
• Consider future resource mix changes
• Evaluate broader benefits of regional transmission projects
• Provide adequate mechanisms for cost allocation across regions 

These shortcomings created barriers to building the large-scale transmission infrastructure needed to integrate renewable generation and maintain grid reliability.

Core Objective of Order 1920

The fundamental goal of Order 1920 is to ensure that transmission providers conduct long-term regional transmission planning capable of identifying and developing cost-effective transmission solutions.



FERC requires that regional planning processes:

1. Identify Long-Term Transmission Needs
2. Evaluate regional transmission solutions
3. Quantify system benefits
4. Select projects based on cost-effectiveness
5. Allocate project costs fairly across beneficiaries
   

Long-Term Regional Transmission Planning

Planning Horizon

A key feature of the new rule is the requirement for long-term planning horizons, typically covering 20 years or more.

Transmission providers must evaluate how system conditions may evolve due to:

• Load growth
• Resource retirements
• Renewable generation expansion
• public policy changes
• electrification trends
• reliability risks

This approach ensures that transmission infrastructure is designed for the future grid, not just current conditions.

Scenario-Based Planning

Order 1920 requires transmission planners to develop multiple plausible future scenarios when assessing transmission needs.

Each planning region must evaluate at least three diverse long-term scenarios, incorporating key drivers of grid transformation. 

These scenarios must consider factors such as:

• Resource mix changes
• Load growth
• electrification
• fuel price uncertainty
• policy mandates
• extreme weather impacts

Scenario analysis enables planners to identify transmission investments that remain valuable across multiple future outcomes.

Long-Term Transmission Needs

A central concept introduced by the rule is Long-Term Transmission Needs, which represent system requirements identified through forward-looking planning.

These needs may arise from:

• Generation shifts toward renewable energy
• interconnection of large energy resources
• reliability constraints
• congestion management
• resilience improvements



Transmission facilities selected through this process are known as Long-Term Regional Transmission Facilities.

Regional Transmission Cost Allocation

Cost allocation has historically been one of the most contentious issues in transmission planning.

Order 1920 introduces reforms to ensure that costs are assigned based on beneficiary-pays principles.

Transmission providers must develop ex-ante cost allocation methods that determine how costs are distributed before projects are selected. 



This improves transparency and reduces disputes during project development.

Role of State Regulators

One of the most significant reforms in Order 1920 is the expanded role of states.

State regulatory bodies called Relevant State Entities play a critical role in:

• negotiating cost allocation approaches
• participating in planning processes
• ensuring alignment with state energy policies

Transmission providers must engage with these entities during a six-month engagement period, allowing states to propose cost allocation methodologies. 



This collaboration ensures that transmission planning reflects both regional grid needs and state policy objectives.

Coordination with Non-Jurisdictional Utilities

The rule clarifies how transmission planning should address the needs of non-jurisdictional utilities such as municipal utilities and cooperatives.

Transmission providers are not required to plan for these entities unless they participate in the regional planning process and agree to cost allocation rules. 

However, voluntary participation arrangements remain possible if they comply with cost-causation principles.

Implications for the U.S. Grid

FERC Order 1920 represents a fundamental shift toward proactive transmission expansion.

Key expected outcomes include:

1. Faster Transmission Development

Better planning reduces project delays and improves interregional coordination.

2. Renewable Integration

The rule facilitates transmission development needed to connect large renewable resources.

3. Grid Reliability

Forward-looking planning helps address extreme weather risks and resource adequacy.

4. Economic Efficiency

Regional projects may reduce congestion costs and lower electricity prices.

Role of Engineering Firms in Order 1920 Implementation

The complexity of long-term planning and regulatory compliance creates a strong demand for specialized engineering expertise.

Consulting firms like Keentel Engineering support utilities and developers through services including:

• Transmission planning studies
• Production cost modeling
• Power flow and contingency analysis
• Dynamic stability analysis
• Renewable integration studies
• Interconnection studies
• NERC compliance assessments
• regulatory compliance support

Advanced modeling tools commonly used include:

• PSSE
• PSCAD
• TSAT
• PowerFactory
• PLEXOS
• MATLAB/Simulink

These tools enable accurate modeling of future grid conditions under the long-term scenarios required by Order 1920.

How Keentel Engineering Supports Utilities

Keentel Engineering provides comprehensive services to support compliance with modern grid planning regulations.

These services include:

Transmission Planning Studies

Long-term scenario modeling aligned with FERC Order 1920 requirements.

Power System Modeling

High-fidelity dynamic and steady-state modeling.

Cost-Benefit Analysis

Evaluation of transmission alternatives and benefit metrics.

Interconnection and Integration Studies

Assessment of renewable and inverter-based resource impacts.

Regulatory Advisory



Technical support for regulatory filings and compliance.

Conclusion

FERC Order 1920-B represents one of the most consequential reforms in U.S. transmission policy in decades. By requiring long-term regional transmission planning and improved cost allocation processes, the rule aims to modernize grid planning and accelerate the development of transmission infrastructure needed for the future energy system.

As utilities and grid operators implement these reforms, engineering expertise will be essential to navigate planning requirements, conduct complex studies, and support regulatory compliance.

Firms like Keentel Engineering provide the technical expertise necessary to help utilities, developers, and system operators successfully adapt to this evolving regulatory landscape.

FAQ – FERC Order 1920 and Transmission Planning