Power & Pipes

FERC, CFTC, and State Energy Law Developments

At its December 2021 open meeting, the Federal Energy Regulatory Commission (FERC or the Commission) approved new rules to improve utilization of the transmission system by redefining “transmission line rating” to account for ambient weather conditions. The Commission expects that the change will permit greater transmission line utilization while also fostering reliability and safety. Transmission providers have 120 days to submit a compliance filing to account for the redefinition and must implement all requirements within three years of the compliance filing due date.


A transmission line rating represents the maximum transfer capability of the transmission line. Ambient air temperature, among other things, can affect transmission capability. Warmer weather reduces transmission capability whereas colder weather increases it.

At present, however, many transmission line ratings are calculated based on static or seasonal assumptions about ambient conditions. These assumptions usually rely on conservative assumptions about worst-case, long-term air temperature and other weather conditions. As a result, the Commission assessed that the transmission grid is being underutilized. Due to conservative weather assumptions, actual temperatures are often below the assumption, resulting in unnecessary restrictions on transmission and potentially higher congestion costs. Alternatively, if ambient temperatures exceed assumptions, the transmission system faces reliability and safety concerns due to overstated transmission capability.

The Commission also recognized that many other factors besides ambient temperature would affect a transmission line’s capability (e.g., wind, cloud cover, precipitation).

In either event, use of seasons or static temperature assumptions results in transmission line ratings not reflective of actual capability during certain periods. Because of the inherent effect on wholesale energy, capacity, and ancillary service prices, the Commission finds the inaccurate transmission line ratings to result in unjust and unreasonable rates, triggering FERC’s ability to impose new requirements.

Redefinition of ‘Transmission Line Rating’ and Implications

FERC’s final order avers that commenters on the final rule “overwhelmingly agree” with the Commission’s preliminary findings regarding transmission line ratings and the need for methodology changes to make ratings more reflective of actual conditions. Some transmission owners, however, questioned FERC’s legal authority to issue binding transmission line rating requirements, but FERC held that it had such authority because transmission line ratings have a direct effect on rates for the transmission of electricity in interstate commerce.

The Commission’s final rule makes several changes. These changes fall into five broad categories:

  1. New definitions relating to transmission line rating
  2. Requirements to expand use of ambient-adjusted ratings (AARs), which are ratings that reflect actual ambient air temperature
  3. Required use of emergency transmission line ratings
  4. Requirements to facilitate transparency into transmission line ratings used by transmission owners and providers
  5. Revisions to the pro forma Open Access Transmission Tariff (OATT) as necessary to reflect these changes

Updated Definitions

The Commission has adopted several new definitions for transmission line rating, AAR, dynamic line rating (DLR), and Seasonal Line Rating.

  • “Transmission line rating” is defined as “the maximum transfer capability of a transmission line computed in accordance with a written transmission line rating methodology and consistent with Good Utility Practice, considering the technical limitations on conductors and relevant transmission equipment (such as thermal flow limits), as well as technical limitations of the Transmission System (such as system voltage and stability limits).”
  • “AAR” means a transmission line rating that applies in increments of one hour or less; reflects up-to-date temperature forecasting during the applicable period; accounts for the lack of solar heating during nighttime periods (if local sunrise and sunset times are updated at least monthly); and is recalculated at least each hour.
  • “DLR” means a transmission line rating that applies in increments of one hour or less, and reflects additional inputs such as wind, solar heating intensity, transmission line tension, or transmission line sag.
  • “Seasonal Line Rating” means a transmission line rating that applies to a specific season, where there are at least four seasons; reflects an up-to-date forecast of ambient air temperatures across the seasons; and is recalculated at least annually for each season in which transmission service can be requested.

Increased Use of AARs

The final rule makes two changes to increase use of AARs. For transmission service requests ending within 10 days from the date of the request, all transmission providers, including Regional Transmission Organizations (RTO) and Independent System Operators (ISO) for transmission service at their seams, use AARs as the basis by which to evaluate both transmission service requests and the necessity of curtailment, interruption, or redispatch of transmission services anticipated to occur within those 10 days.

For longer-term transmission service where transmission service requests will end more than 10 days from the date of the request, the final rule requires that transmission providers use Seasonal Line Ratings as the basis by which to evaluate both transmission service requests and the necessity of curtailment, interruption, or redispatch of transmission services anticipated to occur more than 10 days into the future.

Emergency Ratings for Contingency Analysis

The final rule requires transmission providers to use “uniquely determined emergency ratings for contingency analysis in the operations horizon and in post-contingency simulations of constraints.” The Commission notes that transmission equipment can often tolerate extremely high currents for short periods, and thus the purpose of an emergency rating would be to reflect the additional current that a line can withstand and the amount of time that a line can tolerate it before being damaged.

Increased Transparency

The final rule adds several requirements to increase transparency. Public utility transmission owners must now share transmission line ratings and methodologies with their transmission provider and market monitor, and, upon request, with another transmission provider. Transmission providers must also post on their Open Access Same-Time Information System (OASIS) site or another password-protected website their transmission owners’ transmission line ratings and methodologies and any uses of exceptions or temporary alternate ratings.

New Attachment to Pro Forma OATT

FERC has updated its pro forma OATT to add a new attachment, Attachment M for Transmission Line Ratings. Attachment M will contain the new definitions, require transmission providers to use AARs (or Seasonal Line Ratings if AARs cannot be used) and emergency line ratings, and implement the transparency requirements.

These transmission line rating changes will also be reflected in the Commission’s regulations in 18 C.F.R. Part 35 as applicable.

No Mandate for Use of DLR

Despite defining “DLR” and noting that it would lead to more accurate line ratings than the use of AAR, the Commission has not mandated the use of DLR. FERC noted that some RTOs and ISOs rely on software and systems that cannot accommodate frequent changes to transmission line ratings, and thus cannot implement the use of DLRs. Instead, the Commission will further investigate DLR usage in a new docket, AD22-5. But FERC is requiring RTOs and ISOs to establish and maintain the systems and procedures necessary to allow transmission owners to electronically update transmission line ratings on at least an hourly basis.

Effective Compliance Date

Transmission providers have 120 days from the effective date (60 days after publication) to submit a compliance filing to revise their OATT accounts for the changes. Further, all transmission providers must implement all requirements within three years of the compliance filing due date.