Clean energy and utility groups split over FERC's dynamic line rating inquiry

The Federal Energy Regulatory Commission fielded a range of recommendations on how far the agency should go in requiring U.S. transmission providers to implement dynamic line ratings, a grid-enhancing technology capable of unlocking spare capacity on existing power lines.

The suggestions were submitted in response to a notice of inquiry (AD22-5) launched by FERC in February shortly after the commission issued a final rule — Order 881 — that required transmission providers across the country to implement ambient adjusted ratings, or AARs.

Compared with seasonal or static line ratings, AARs can enable higher power transfer capacity on existing transmission lines through the use of near-term forecast ambient air temperatures typically updated on an hourly basis. But dynamic line ratings, or DLRs, are even more accurate. DLRs, which are updated at 15-minute intervals, use sensors that produce real-time field data on limiting factors such as wind speed, cloud cover, solar irradiance and line tension or sag.

A February 2021 study performed by consulting firm The Brattle Group estimated that DLRs, when implemented with other grid-enhancing technologies, could double renewable energy penetration in the wind-rich Southwest Power Pool region.

Another study released April 22 by the U.S. Department of Energy found that implementing DLRs on just 16 transmission line segments in New York would cut wholesale electricity costs in the state by $1.8 million annually and reduce renewable energy curtailment by 9%.

Order 881 (RM20-16) stopped short of requiring DLRs in recognition that the public record was insufficient at the time to mandate the broader deployment of DLR technology.

To that end, FERC's notice of inquiry asked commenters to weigh in on the threshold question of whether DLRs should be required to further increase the accuracy of U.S. transmission line ratings. FERC also asked parties to address the trade-offs associated with DLR implementation and whether the commission should establish specific criteria for identifying transmission lines that would benefit from the technology.

Comments on the commission's notice of inquiry were due April 25.

FERC has also proposed requiring DLR consideration as part of a broader long-range transmission planning and cost allocation rulemaking (RM21-17) unveiled this month.

Clean energy interests support widespread deployment

The WATT Coalition, a group of technology providers seeking to boost DLR deployment, identified three primary benefits related to DLR implementation. DLRs can reduce transmission costs, help connect more renewable energy resources to the grid and reduce renewable energy curtailment, the coalition said.

Regulated utilities' cost-of-service business model represents the greatest barrier to DLR deployment, the WATT Coalition said in joint comments with the American Clean Power Association, the Solar Energy Industries Association and clean energy trade group the Advanced Energy Economy.

That business model generally incentivizes incumbent transmission owners, which in many cases are investor-owned utilities, to pursue large-scale, capital-intensive transmission projects that maximize returns for shareholders, the groups said.

The coalition recommended that FERC require transmission providers to consider DLR implementation on lines where congestion costs have totaled $500,000 within the last year or are projected to reach the same amount in the future.

The commission should also consider requiring DLR implementation for lines identified as limiting factors in generator interconnection studies, the groups said. In addition, consideration should be given to lines where generation was curtailed by more than 10% on average over a one-year period as well as lines in areas with high average wind speed, the coalition said.

To help align business incentives, FERC should consider allowing transmission owners to share in a certain percentage of the savings produced by DLR implementation, the WATT Coalition said.

A coalition of environmental groups led by the Natural Resources Defense Council said FERC should also consider allowing transmission providers to earn a return on installations of DLR-related software and hardware, which are currently booked as operation and maintenance expenses.

SPP's market monitoring unit argued that FERC should require DLR implementation for all lines, with the same exceptions outlined for AARs in Order 881.

"If transmission owners were required to implement DLRs on only a subset of all transmission lines, the potential for preferential and discriminatory selection of certain lines by transmission owners exists," the market monitor said.

Alliant Energy Corp. and DTE Energy Co. jointly said that FERC should establish mandatory requirements for DLR adoption in part because transmission owners "have made little to no progress in capturing the benefits of DLRs for transmission customers."

The two utilities said DLR implementation in the Midcontinent ISO region "has been minimal because financial incentives discourage [transmission owners] from pursuing grid optimization projects over traditional transmission solutions such as new line build."

The Electricity Consumers Resource Council also called for DLR requirements on all lines unless transmission owners can demonstrate the costs of DLR implementation would exceed the benefits to consumers.

Industry urges caution

However, industry trade groups such as the Edison Electric Institute, the American Public Power Association and the National Rural Electric Cooperative Association urged FERC to take a more cautious approach.

The Edison Electric Institute said the commission "especially" should not require the use of DLRs when transmission providers have only just started to comply with Order 881's requirements for AARs.

"Until the industry has implemented Order No. 881's requirements, the commission will not be in a position to obtain the information to make the findings required by section 206 of the [Federal Power Act] for the commission to require DLR use," the National Rural Electric Cooperative Association said.

If FERC does decide to mandate DLRs, it should limit implementation to congested transmission facilities, "with a focus on lines of 100 kV or higher, where consequential benefits are likeliest to materialize," the American Public Power Association said.

Regional transmission organizations such as the ISO New England, MISO and SPP — as well as transmission owners within their footprints — largely echoed that sentiment.

"While DLRs can, in the right circumstances, provide a useful tool to address these challenges, they are generally expensive and may not be the most impactful solution, especially in view of the ambient adjusted ratings requirements already adopted by FERC Order No. 881," MISO said.

A group of MISO transmission owners added that "applying DLRs on transmission lines with no congestion or minimal congestion will only serve to increase wholesale transmission rates with no commensurate benefits."

But LineVision Inc., a leading developer of sensor-based DLR technology, pushed back on the idea that DLRs are not ready for widespread deployment.

"The work that is required for Order 881 and the move toward electronically updating transmission line ratings at least hourly paves the way for implementation of DLR, which simply adds the additional component of the sensor," LineVision said.

The North American Electric Reliability Corp. noted that DLR implementation could introduce grid reliability risks in cases where a transmission provider sells spare transmission capacity when that capacity is actually unavailable.

If DLR systems are compromised near transmission line seams, that could also "create widespread congestion management challenges for reliable operations," NERC said.

NERC recommended that transmission providers "design controls so that they can validate that sensors are operating correctly and that any changes in ratings based on DLR sensor data are appropriate for that particular line, taking all relevant considerations into account."

S&P Global Commodity Insights produces content for distribution on S&P Capital IQ Pro.