Federal Energy Regulatory Commission (FERC) Chairman Laura Swett said Wednesday that the agency has established a working group on "grid enhancing technologies" (GETs) to study how to support these technologies, potentially including providing incentives.

Swett, at a U.S. SenateEnergy and Natural Resources Committee oversight hearing, noted that utilities have begun proactively adopting GETs—including dynamic line ratings, advanced power flow controllers, and high-performance conductors—and that related cost-saving data is now available.

According to Swett, the Federal Power Act prohibits FERC from mandating utilities to use GETs, but the agency can direct transmission owners to conduct analyses of relevant technologies. Such analyses help identify the most cost-effective options when considering new transmission infrastructure.

FERC Commissioner Judy Chang added that FERC could also incorporate GETs into its process for grantingincentives. When parties apply for incentives, FERC could require them to explain the technologies being implemented, other options considered, and why the best available technology was not adopted.

Independent Senator Angus King of Maine noted that while FERC cannot mandate specific technologies, it has an obligation to approve "just and reasonable" rates. "If a transmission provider takes actions that lack economic justification and will harm ratepayers, that does provide a point of entry for you to more closely examine what they are actually doing," King said.

King also noted that transmission owners currently have an incentive to invest as much as possible in infrastructure—perhaps even "gold-plating"—to earn as much return as possible. This in turn discourages them from investing in lower-cost GETs. "One of the questions we need to study is how to provide shared savings mechanisms or other incentives to encourage companies to make such investments. Because grid enhancement costs will rise significantly in the coming years... If we don't take a smart approach, this cost will become unbearable in the next 5 to 10 years," King said.

PJM Governance Reform

A day before FERC's scheduled technical conference on PJM Interconnection governance reformtechnical conference, Swett told the committee that PJM is the largest and oldest electricity market in the U.S., but "possibly also the worst-performing."

"We are optimistic that parties will be able to reach consensus on what the market needs to change after tomorrow's meeting concludes and subsequent comments are submitted, allowing us to provide clearer direction," Swett said.

"For me, success means that in the near future, PJM can quickly propose solutions, gain clear member support, and submit high-quality filings to FERC so that we can move efficiently and make this market effectively serve the nation," Swett said.

FERC Commissioner David Rosner said PJM currently saves consumers billions of dollars annually through efficient grid operation and transmission system planning. "But... none of this works without state support," he said. "We set market rules that generate price signals for investment, but if states don't recognize how prices are formed, it all falls apart."

Transmission Competition

Committee Chairman, Republican Senator Mike Lee of Utah, said it has been 15 years since FERC issued Order 1000 to introduce competition into transmission processes, but that push "has not fully materialized." "What additional measures do you think the Commission can take to bring more competitive pressure to the electric industry, which could hopefully improve prices and reliability for consumers?" Lee asked FERC commissioners.

Chang said some regions have begun implementing competitive transmission processes, but the efficiency and cost savings for consumers are just beginning. "We should seek additional efficiencies through competition where possible," she said. "The backbone transmission system is critical for integrating the large loads and new large-scale generation we are seeing, and lowering costs for all consumers requires competition."

Data Center 'Show Cause' Orders

In response to questions about FERC's "show cause orders" to major grid operators—requiring them to explain how they willconnect data centers and other large loads to the grid—Swett said: "With few exceptions, utilities and markets are reluctant to change and need strong directives to drive innovation. These orders issued in June are the perfect tool for us to mobilize market experts and the market itself to push the grid into the future."

According to Swett, key elements of these orders include FERC requiring parties to act quickly to modernize transmission service and interconnection study processes. "This will save consumers significant money. Under our directives, they are now... compelled to consider advanced transmission technologies in the study process and to study loads that may appear near generation facilities, which will reduce the amount of transmission construction needed to connect loads," Swett said.

Additionally, Swett said FERC is pushing for greater accountability in generation construction. "FERC has no jurisdiction over generation, but because we have directed each market to report to us on what it intends to do and how it will address the generation cliff our nation is facing, this is driving parties to think and hopefully prompting action," Swett said.