New energy laws and regulations have a common element – location. That’s why GIS is foundational for navigating the waters of compliance. It models assets, creates insight, and promotes sharing with the industry stakeholders.
Laws and rules have impacted the electric industry over the last century, hurling it toward competition.
Understanding this complex industry requires models. Those GIS models include data about the connected network, risks to the grid, the location of assets, climate, and stakeholder impact. Stakeholders include customers, competitive suppliers, independent power producers, and people who create and enforce the laws and rules of the energy business.
The value of mapping and GIS has grown as the utility infrastructure, particularly the bulk power system, has developed. The grid will grow significantly in scope. And it will grow in complexity over the next decade. There will be an increase in inverter-based resources (IBR), such as solar and wind generators. These changes in technology have thrown a monkey wrench into how the industry analyzes and manages the grid. In addition, the changing laws and regulations drive a need for better spatial models. GIS provides the framework to document and analyze the grid’s past, present, and future state.
Laws, Acts, and Rules Evolve
Congress passed the first major energy law, the Federal Water Power Act (FWPA), in 1920. The lawmakers designed it to oversee waterways and hydroelectric projects. A key part of the law included the creation of the Federal Power Commission (FPC). It created rules, regulations, and orders. In 1935, Congress amended the FWPA to create the Federal Power Act (FPA). It gave the FPC the charge to regulate interstate transmission and sale of electricity based on the growing concern that transmission line owners would limit competition. And they did. In those early days, the commission relied heavily on maps to visualize the areas of concern.
Deregulation is Born
In 1977, Congress passed the Department of Energy Organization Act, which created a new executive branch department, the Department of Energy (DOE). James R. Schlesinger was the first Secretary of Energy. In addition, the lawmakers created a new commission, the Federal Energy Regulatory Commission (FERC), as a replacement for the FPC. The US president appoints the FERC commissioners. FERC creates the rules, while the DOE provides studies, analytics, statistics, and research on new technologies. Both leverage GIS heavily to do their work.
One year later, Congress passed another law, the Public Utility Regulatory Policies Act (PURPA). It heated the move toward energy competition. It defined non-utility power plants, including the fledgling solar, geothermal, and wind plants.
Competition Comes to Life
Then came the Energy Policy Act of 1992. It expanded the ability to produce power independently of utilities. Now, the biggie. By authority of the Energy Policy Act, FERC created the landmark order 888. This order opened the floodgates to wholesale competition. It specified open, nondiscriminatory access to utility-owned transmission systems. Complaints from non-utility generators argued that utilities favored their generators and sometimes blocked their access. FERC also created the Open Access Same-time Information System (OASIS) to provide a mechanism to assure fair access.
FERC 888 also required transmission utilities to file non-discriminating fees (or tariffs) for transmission services, thus moving competition further. In an associated order, FERC 889 created additional rules (based on the authority granted through the Energy Policy Act) to ensure compliance.
Location is Key
For years, electric demand has remained stable. Due to energy efficiency standards and the rise of local solar installations, demand in some areas has even dropped. That situation will rapidly change. Decarbonizing transportation, industry and home heating will skyrocket demand. Who could have foreseen this development with the passage of PURPA in 1978?
According to the October 2023 DOE National Transmission Needs Study, there is a multi-year backlog of new transmission interconnection requests. Transmission congestion is limiting the free flow of power across the grid. All grid stakeholders must model the grid more accurately than ever. They need to use spatial analysis to site new generation and transmission lines and map the disparities of wholesale prices. They must do a better job of interregional transmission planning as the nation heads toward full implementation of decarbonization.
This is where GIS plays a huge role, not just for local distribution systems. Location will play a role throughout the entire energy supply value chain, from wholesale production to electric vehicle charging infrastructure.
Laws and Orders Drive the Utility Business
The next blog will pick up from FERC 888 and 889. It will cover the formation of Regional Transmission Operators (RTOs) and Independent System Operators (ISOs). It will cover the formation of the North American Electric Reliability Corporation (NERC) and the various Regional Entities (REs). With each new law, technology will be the key to compliance and grid development.
Learn how location technology in the form of GIS provides the means to meet the great opportunities that await us during the next decade.
Sidebar – Laws Vs. Acts Vs. Orders
Once a bill is passed by Congress and signed by the president, it becomes the law of the land. The law is called an act because it is enacted, read en “act: ed upon by Congress. Once it is signed, the law is incorporated into the US Code. An act often adds new language, deletes sections, or changes the official US Code. The Office of Law Revision Counsel, US House of Representatives, incorporates the new law into the US Code. So, the new law doesn’t stand alone. Rather, it is incorporated into the single US Code.
Congress creates laws (acts) that empower certain commissions, such as FERC, to create rules and orders. FERC creates a rulemaking process, which is often a result of an order. After the rulemaking process, FERC issues final rules. These rules must be followed under the penalty of law.
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