FERC Requires Transmission Providers to File Extreme Weather Assessments
The Federal Energy Regulatory Commission (FERC or Commission) on June 15, 2023, finalized a rule requiring interstate electric transmission providers to file one-time informational reports assessing the susceptibility of their systems to extreme weather events.
This rule, which draws upon a Notice of Proposed Rulemaking issued by FERC on June 16, 2022, arises out of the Commission's finding that the frequency and severity of extreme weather events have increased in recent years – likely due to climate change – with critical effects on the reliability of the nation's electric transmission grid. In support of this finding, FERC cited recent, highly destructive storms across the country such as Winter Storm Elliott in December 2022, hurricanes Ian (in September 2022) and Ida (in August 2021), and Winter Storm Uri in February 2021. These storms led to massive, and sometimes unprecedented, customer outages and inflated electricity prices.
Given the escalating nature of these events, FERC, along with the North American Electric Reliability Corporation, has begun to examine the state of readiness among the electricity providers under its purview. To this end, FERC conducted a technical conference on Climate Change, Extreme Weather, & Electric System Reliability on June 1-2, 2021. Though this conference underscored the need for proper planning for extreme weather, FERC concluded that it lacked a clear understanding of whether and to what extent transmission providers are currently conducting, or planning to conduct, extreme weather vulnerability assessments, the method(s) used to conduct these assessment and what is done with the information from these assessments.
These informational gaps prompted FERC to issue the current rule. Relying upon its authority under Section 304 of the Federal Power Act (FPA), which authorizes FERC to order reports as "necessary or appropriate to assist the Commission in the proper administration of the [FPA]," the Commission in this final rule directs each transmission provider under its jurisdiction to file a one-time informational report of its extreme weather vulnerability assessment and risk mitigation efforts within 120 days of the publication of the final rule in the Federal Register. This one-time informational report must include whether, and if so how, transmission providers:
- establish a scope
- develop inputs
- identify vulnerabilities and exposure to extreme weather hazards
- estimate the costs of impacts in their extreme weather vulnerability assessments
- use the results of those assessments to develop risk mitigation measures
Importantly, this final rule seeks only to gather information on current and planned policies and processes from transmission providers, not to establish new requirements. However, FERC could foreseeably rely upon the information provided to impose new planning and readiness measures on transmission providers under its jurisdiction. Indeed, in his concurring statement to the final rule, Commission Chairman James Danly cautioned that FERC's powers under FPA Section 304 are limited and further warned that the Commission should be judicious in limiting its use of the information provided to matters firmly within its FPA jurisdiction.
Regardless, given the import of this subject, FERC-jurisdictional transmission providers should closely follow the Commission's actions in this arena in the months and years ahead.