The Spirit of Order 1920 and National Corridors

The reform that captures where FERC's thinking has landed is its long-term regional transmission planning rule, known by its docket as Order 1920. You do not need to memorize the number; you need to understand its spirit, because that spirit is the through-line of the entire policy trajectory. In one sentence: regions must now plan the transmission backbone deliberately, decades ahead, for a range of plausible futures, and must decide in advance how the cost of that backbone will be fairly shared.

Take the pieces one at a time. First, long-term and proactive. Instead of planning only to fix today's reliability gaps or to connect the next generator in the queue, regional planners are required to look far out — on the order of twenty years — and identify the transmission the region will need as its generation mix, its demand, and its large new loads evolve. This is the direct answer to the reactive-patchwork failure of the past: plan the backbone before the crisis, not after.

Second, scenario-based. Because the future is uncertain, planners must study multiple plausible scenarios rather than a single forecast — different mixes of generation, different demand growth, different policy environments — and find the transmission that performs well across many of them. The logic is empirical humility: you cannot know exactly which future arrives, so you build the lines that are robust across the range. This is meant to stop regions from dodging big lines by assuming away the growth that would justify them.

Third, and most politically fraught, cost allocation decided up front. The single hardest thing about big transmission is agreeing who pays, and disputes over that question have frozen sound projects for years. The reform requires regions to establish, ahead of time, methods for allocating the cost of long-term regional lines in proportion to the broad benefits those lines provide — reliability, lower congestion, access to cheaper power, resilience. By settling the cost-sharing rules before specific projects are on the table, the reform aims to defuse the fights that have historically killed backbone lines after the engineering was already done.

Fourth, counting benefits broadly. A recurring reason big lines failed cost-benefit tests was that only a narrow slice of their benefits was counted. The reform pushes planners to account for the wide, long-run value a large line delivers — not just meeting one reliability standard, but reducing congestion for decades, hedging against extreme weather, and opening access to lower-cost resources. Count the benefits honestly and the case for the backbone strengthens, which is precisely the point.

Alongside FERC's planning reform sits a complementary federal lever aimed at the siting seam: national-interest transmission corridors. Because states have historically been able to stall interstate lines whose benefits fall mostly elsewhere, federal law lets the Department of Energy designate geographic corridors where transmission congestion is harming the national interest. Within a designated corridor, a limited federal role in siting can, under defined conditions, help move a critical line forward when state processes have stalled. It is a targeted answer to the fragmentation problem: keep siting largely with the states, but create a federal backstop for the handful of nationally important lines that would otherwise die in a single state's proceeding.

Reading the trajectory as a whole, the direction is unmistakable and consistent: from reactive to proactive, from local to regional, from narrow benefit counting to broad, from cost fights after the fact to cost rules agreed in advance, and from a purely state siting process to one with a federal backstop for the most important corridors. Each move attacks one of the specific failures we diagnosed earlier. None of it builds a line by itself — planning and cost rules are upstream of steel in the ground — but by fixing the planning and payment machinery, the reform aims to shorten the slowest, most contested part of the pipeline.

For the investor, the signal to track is adoption and follow-through: a region that genuinely implements long-term, scenario-based planning with settled cost allocation is lowering the structural risk that new load waits a decade for wires. For the operator, the reform is slow-acting terrain rather than a near-term rescue — helpful for the projects of the late 2020s and 2030s, not the one you need energized next year. And for the policy reader, the honest framing is this: the reform trajectory is coherent and points the right way, but its impact is measured in the pace of construction it eventually unlocks, and that will be contested every step — over cost allocation especially — for years. Judge it not by the elegance of the rule but by whether the backbone actually gets planned, funded, and built.