As utilities finalize 2026 budgets, costs related to compliance with FERC Order 881 should be kept in mind. Even with recent deadline extensions approved for regional transmission organizations (RTOs) and independent system operators (ISOs), compliance mandates are looming larger. New effective dates currently range from April 2026 to year-end 2028.
Utilities should not fall into the trap of thinking they have plenty of time. The tasks of implementing data management protocols as well as data storage, retrieval and reporting could take at least six months, and potentially up to a full year for more complex implementations. Early planning and proactive budget allocations will help to avoid fines, resource strain and project delays.
For most utilities the bid procurement process spans approximately 12 weeks. Even for direct-award procurement, the cycle can last up to six weeks for proposal evaluations and supply chain considerations.
Following selection, the facility rating methodology must be evaluated, a process that can require up to 16 additional weeks. Common considerations include when it was last updated, whether it addresses ambient adjusted ratings (AAR) and methodology updates that may be needed.
All these steps mean that it will take four to six months before the AAR integration and platform setup process can begin. Integrating weather data, uploading the facilities into the AAR platform, and quality controlling could potentially require another 12 to 16 weeks.
Even under the best-case six-month implementation and integration scenario, utilities in certain regions with more aggressive 2026 deadlines are already behind schedule.
Barring further extensions, here are implementation deadlines by region:
FERC 881 Is Coming
Since FERC issued Order 881 in late 2021, system operators and utilities alike have been contemplating how they will meet new requirements for hourly reporting of ambient adjusted ratings (AARs) on each piece of equipment. Though the order is expected to accomplish its goal of increasing power flow capacity through more accurate and dynamic assessments, the shift has been overwhelming for many operators, particularly smaller co-ops and municipally owned utilities.
The new regulatory framework mandates that operators source temperatures for the various locations on the system and then calculate ratings on a 10-day look-ahead period. The AARs set the thresholds at which the equipment can safely operate and are limited by the lowest-capacity component within the power flow path. Another key element of FERC 881 is a requirement to retain all historical ratings for a period of five years.
For operators, the changes go far beyond simple matters of compliance, directly impacting system reliability, asset utilization and situational awareness. Implementing AARs allows operators to:
Meeting these requirements often involves implementing new tools, reworking existing processes and integration across multiple departments. Depending on system complexity, implementation could take longer than perhaps originally forecast, making cyclical budget planning critically important for meeting the compliance deadlines.
Technology to the Rescue
With many smaller utilities facing a heavy lift, the need for a technology solution is clear. A tool with the flexibility to model facilities so that ratings can be calculated for every piece of equipment across a range of ambient conditions would greatly alleviate many of the anticipated stresses of compliance.
FaciliRate, a proprietary tool developed by Burns & McDonnell, is one such solution that has been designed with the flexibility and functionality to enable utilities to manage this complex task with confidence.
In the past, many smaller utilities have used spreadsheets to track the ratings data on their system. That solution was perfectly suitable for meeting the prior regulatory requirements.
Now, however, tracking and compliance will be greatly emphasized. Equipment monitoring and ratings adjustments on temperatures expected over the following 10 days will require periodic calculations to validate if prior calculations were correct.
FaciliRate is a dynamic tool that can be custom programmed to account for the unique characteristics of each utility system. It plugs into the utility’s existing database and generates a model that calculates and maps ratings for each piece of equipment on the system at various operational and ambient conditions.
The model can effectively serve as a capital planning tool by identifying components with lower ratings that limit the overall capacity of a given circuit. This allows utilities to understand which pieces of equipment should be replaced to meet certain capacity goals. The data repository function of the tool gives the utility a means to easily comply with audit requests by pulling ratings records for the overall facility or even drill down into individual conductors.
How to Stay Ahead
Readiness for the daunting requirements of FERC 881 is truly a multidisciplinary effort, with impacts to operations, IT, engineering, planning and compliance functions. Utilities that start well in advance of the deadlines can align priorities for various stakeholders and develop a compliance plan which can be executed on a manageable schedule that does not disrupt day-to-day operations.
Key steps include:
FERC 881 compliance is about building operational agility for the grid of the future. Early, coordinated planning empowers operators to enhance reliability, optimize investments and strengthen system resilience.