The Federal Energy Regulatory Commission (FERC) has taken a significant step that is intended to result in better utilization of existing high-voltage transmission system capacity by providing for improved accuracy and transparency of electric transmission line ratings.

On Dec. 16, 2021, FERC issued Order 881. The order requires transmission providers to implement and use ambient-adjusted ratings for transmission lines used to provide transmission service. Regional transmission organizations (RTOs) and independent system operators (ISOs) must develop systems and procedures to allow transmission owners to electronically submit updated transmission line ratings at least hourly. Public utility transmission providers must maintain an accessible, password-protected database of transmission line ratings and rating methodologies of transmission owners.

The order mandates new operating practices for transmission service providers, transmission owners and system operators. The order sets several new requirements that move the power industry toward a more dynamic method of transmission line ratings that are adjusted at least hourly based on ambient temperatures. The change is aimed at setting limits that more closely comport with system operating conditions.

The commission implemented the change by updating its Open Access Transmission Tariff (OATT) Attachment M to include definitions for transmission line rating, ambient adjusted rating (AAR), and seasonal line rating, to list a few. Attachment M also documents the obligations of the transmission provider, including the requirement to use AARs in evaluating and responding to requests for near-term transmission service. AARs are also required in determining curtailment of firm and non-firm point-to-point transmission service. In short, Attachment M defines the type of ratings to be used and posted on the Open Access Same Time Information System (OASIS) or other password-protected websites commonly used by market participants.

Order 881-A

In May 2022, FERC clarified its Final Rule Order 881 targeted at managing transmission line ratings issued in December 2021. Retitled as Order 881-A, it denied requests for rehearing but provided clarification on Order 881. In part, Order 881-A addressed the requirement for AARs to be implemented on all Transmission Line and Seasonal Line ratings, the use of AARs on a 10-day-forward basis in transmission service, operations and transmission protective relay settings among other “miscellaneous issues.”

Concerning transmission protective relay settings, FERC clarified that in the circumstance that “favorable ambient conditions” result in higher transfer capability, then transmission providers must consider the impact of protection settings for the impacted facility as it relates to transmission loadability under PRC-023-4. This clarification arose from rehearing requesters’ concerns that Order 881 would require new worst-case scenarios for loadability.

Reason for the Change

FERC seeks to improve transparency in the way transmission line ratings are calculated. Further the commission anticipates “significant reliability, operational and economic benefits.” Mandating documented and publicly available written transmission line rating methodologies, along with ambient-adjusted ratings are expected to provide for increased capacity and use of the transmission infrastructure. Hourly transmission line ratings as opposed to traditional seasonal temperature constraints are anticipated to allow for greater utilization of transmission lines. The cost of wholesale energy and cost of interstate electric transmission rates, along with ancillary services are expected to improve because of the impact of Order 881.

FERC concluded that a significant amount of existing transmission capacity could be freed up by simply using it more efficiently. The commission concluded the existing transmission owner facility rating methodologies do not account for actual temperature conditions when using seasonally adjusted temperature ratings, resulting in constrained current-carrying capacity during cooler seasonal temperatures.

What You Should Know

Though we are now in a three-year implementation period, it is certain that the days of applying ratings for conductors based on steady-state temperatures are now over. Our industry faces considerable process, procedural and technological challenges as we work to comply with the requirements of FERC Order 881 and the clarifications of Order 881-A. Also of note, no exceptions for older transmission facilities are made regarding the AAR requirement.

All transmission owners are now required to revise or create methodologies that adhere to the ratings defined in Attachment M. The methodology must encompass ratings for transmission lines as well as all associated equipment that considers temperature increments of 5 degrees Fahrenheit. The ratings effectively define the ambient temperatures at which service will be available and at which it will be curtailed.

More granular data will be needed to determine the ambient-adjusted ratings for each applicable piece of equipment at one-hour increments throughout the day and night. Because the order addresses not only conductors, but circuit breakers, line traps, transformers and other components, ratings will need to reflect the safe operating parameters for each piece of equipment.

The order will almost certainly necessitate infrastructure changes for the respondents per Order 881 defined as: transmission owners, transmission service providers, generator owners, and RTOs/ISOs. The procedures for obtaining operating data from far-flung, remote pieces of equipment may be one of the biggest changes. Long transmission lines may cross multiple climate regions and must be rated accordingly. Upgrades to hardware such as sensors and telemetry systems will likely be necessary, along with software upgrades to accommodate the data requirements. Information must be continuously relayed back so that hourly temperatures can be monitored in real time to see if temperatures are reaching ratings limits set for each component or segment of conductor. The data must be fed into the OASIS in a format that can be easily monitored by all participants.

The written methodology that specifies how ratings are determined will be an important part of these new procedures. Though there are widely available meteorological sources of information for temperatures and forecasts in given locations.

Likely Outcome

Costs for compliance could vary substantially based on the location and condition of transmission infrastructure. Portions of the transmission system components that have been in service for lengthy periods of time may not be compatible with the new systems that must be installed for compliance and may require more comprehensive upgrades.

It is also likely that the changes driven by the FERC order will cascade into modifications of facilities ratings methodologies required by the North American Electric Reliability Corporation (NERC), the regulatory entity charged with maintaining overall reliability of the bulk power grid. Specifically, we are likely to see adjustments to the NERC’s facility rating standards under FAC-008. Meeting the requirements spelled out under FAC-008 has proven to be a tremendous challenge for multiple utilities with respect to compliance with ratings values of assets deployed in the field. A rigorous change management program, a well-thought-out facility rating methodology addressing ambient temperatures impacts to equipment, and strong data management and tracking practices are a crucial foundation for compliance with FERC Order 881.

What You Should Do

It is crucial for transmission service providers, transmission owners and RTOs/ISOs to promptly address the requirements of FERC Order 881 with a sense of urgency and preparedness. These entities must undertake an extensive review of the order and determine what changes are necessary to comply with its policies, procedures and systems. Conducting gap assessments of current methodology is also vital so that all relevant equipment is accounted for and addressed. Facility walk-downs are also recommended for complete and accurate equipment identification. System maintenance, capital project expansion and documentation lost to time are root causes for incomplete equipment records. Asset management and verification are essential elements of facility ratings and Order 881 compliance. Entities need to allow time for review and potential relay settings updates and software modifications for systems such as energy management systems (EMS).

Even though Order 881 does not modify the NERC Reliability Standard FAC-008-5, it is prudent to anticipate any potential impact the order may have on future changes to the standard and its requirements. Furthermore, evaluating the hardware and software requirements mandated by the order in a timely manner is essential. Standard off-the-shelf solutions may not be suitable for each specific environment; thus, a plan must be developed to meet the deadlines, meet system requirements and specifications, and to assess the different options for software solutions.

Collaborating with appropriate internal and external parties can help in managing the transition to effectively meet the requirements of FERC Order 881. Communicating with stakeholders is also essential during changes. While implementing FERC Order 881 presents our industry with real challenges, they are not insurmountable.

The focus on bulk power system reliability and optimized capacity continues a recent trend of attention on protection system coordination and personnel training under FERC Order 847.

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James Crawford III is senior consultant and project manager at Burns & McDonnell for the Governance, Risk, Cybersecurity and Compliance Group. Over a career spanning almost three decades, James has specialized in helping utility clients improve governance and mitigate risk, with a focus on filing and compliance requirements set by the U.S. Federal Energy Regulatory Commission.