Nothing focuses the mind like a deadline. That’s why electric utilities are keenly aware of July 12, 2025: the compliance deadline for a major change in how they must calculate capacity on their equipment.
The Federal Energy Regulatory Commission (FERC) issued Order 881 in December 2021, and it will take full effect this coming summer. The order requires a change in how utilities operate that should unlock additional capacity on existing equipment.
More Frequent, More Accurate
FERC 881 was developed to help operate the electrical grid more efficiently by requiring ambient adjusted ratings (AAR) to be calculated hourly, drawing on forecasted weather conditions, instead of relying on seasonal ratings based on conservative assumptions.
Transmission line facilities comprise every conductor and electrical component that completes a circuit between two substations. The overall facility rating is limited by the lowest-capacity component in the power flow path. While conductor and equipment ratings are sensitive to several environmental conditions, the new requirements in FERC 881 are focused on quantifying the impact of ambient air temperature on transmission capacity. Rising temperatures, for example, can constrain the heat dissipation of a conductor, reducing its current-carrying capacity.
FERC 881 addresses this complexity by requiring utilities to calculate hourly ratings for a 10-day look-ahead period based on localized ambient temperature forecasts for each facility. These calculations provide a more granular assessment of transmission line capabilities than static seasonal ratings. By drawing on actual forecasted temperatures instead of conservative estimates — such as a warm day in October that may be used to calculate the winter seasonal rating — FERC hopes utilities will be able to access additional capacity on the grid.
Given broad national trends toward rising loads on electrical transmission infrastructure, utilities must use transmission planning studies to identify solutions for possible capacity constraints. Conductor and equipment replacements and construction of new transmission lines, while effective, are costly and typically result in rate base increases for consumers. FERC’s goal is to leverage AARs to unlock any additional capacity on existing equipment, helping reduce capital spending that would ultimately be passed on to customers.
With extensive work underway on the transmission grid, coordinating outages can be a significant bottleneck for maintenance activities. Another FERC objective of Order 881 is to clarify actual capacity, which should translate into greater flexibility in outage coordination.
How much increased capacity will the new approach to calculating AARs unlock? This is difficult to quantify because results will vary by location, time of day and time of season. However, there could be situations in certain regions where AARs could be up to 10% higher than conservative seasonal ratings.
Looking One Step Ahead
Utilities preparing to comply with FERC 881 are already evaluating tools and methodologies to support the new hourly reporting standards. As they do so, they should bear in mind that the new AAR approach could represent only a first step in FERC’s efforts to squeeze more capacity from existing infrastructure.
FERC has issued an Advanced Notice of Proposed Rulemaking (ANOPR) on dynamic line ratings (DLR). This signals potential future requirements for utilities to implement DLRs, which would take into consideration not just ambient temperature but also wind speed and solar positioning when calculating transmission line capacity.
While DLR mandates could deliver additional efficiencies on existing infrastructure, the cost-benefit ratio remains unclear. In the meantime, it can be useful for utilities to bear in mind these potential future requirements as they evaluate solutions and process changes to address the hourly AAR calculations required under FERC 881.
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