By Maya Nevels and Steve Gaw for Advanced Power Alliance
Last week, the Federal Energy Regulatory Commission (FERC) took a decisive step toward modernizing the nation’s power grid by approving the consolidated transmission planning process proposed by Southwest Power Pool (SPP), commonly referred to as CPP. For the states and communities served by SPP, this decision marks a breakthrough moment, one that promises to bring unprecedented certainty, efficiency, and opportunity for energy investments across the region.
Advanced Power Alliance (APA) applauds FERC for recognizing the value of this groundbreaking reform. By approving SPP’s forward-looking planning framework, FERC has set the stage for a more coordinated and cost-effective transmission system capable of supporting investment in the expansion of the power sector while maintaining electric reliability for millions of Americans.
Learning From the Limitations of the Past
The transmission planning process has struggled for years to keep pace with the rapidly changing energy landscape. The former system’s inherent flaw created persistent challenges that hindered development and created uncertainty for both grid operators and investors.
Developers and utilities alike faced uncertain and escalating costs, often triggered by repeated restudies of projects already in the interconnection queue. Transmission upgrades were frequently planned only after new resources sought interconnection, meaning the grid was reacting to needs rather than anticipating them.
Planning models struggled to capture the reality of the evolving generation mix. Forecasts for renewable power generation resources were often significantly underestimated, leading to repeated rounds of planning studies that failed to align with actual development trends, costs, and benefits. The failure to identify necessary upgrades resulted in cost-prohibitive transmission upgrades to be proposed in the generation interconnection process for urgently-needed generation resources, which then caused cascading withdrawals of prospective generation resources.
Other inefficiencies compounded the problem. Transmission needs were often evaluated in silos, without coordinated analysis of reliability, economic, and policy drivers. Load forecasts sometimes stalled the planning process. The system frequently pursued piecemeal upgrades rather than comprehensive, cost-effective solutions due to the lack of co-optimized solutions.
These collective challenges created uncertainty that slowed infrastructure development and complicated investment decisions across the SPP footprint.
A Forward-Looking Solution
SPP’s newly approved CPP fundamentally changes the equation.
At its core, CPP is a long-term planning framework that simultaneously models transmission needs for generation and load across a 20-year horizon. CPP provides a clearer picture of where the grid will need to expand as the SPP region grows and evolves by incorporating the impacts of state policies, anticipated generator needs, and emerging load growth into its forecasting.
The CPP is designed to produce a more cost-effective result for consumers and customers by proactively assessing all current and future needs of the grid and comprehensively co-optimizing solutions for their benefit.
Among the most transformative elements is the introduction of Planned Interconnection Locations (PILs), pre-identified points on the grid where new generation can connect. Rather than forcing each project to trigger its own upgrades, the system will proactively expand the grid to meet anticipated needs.
The new process emphasizes co-optimization and integrated analysis, evaluating load and resource needs including reliability, resilience, economic, operational, and policy objectives together instead of separately. This allows planners to identify multi-driver projects that simultaneously address multiple challenges, significantly improving reliability, lowering costs, and supporting resource development in one coordinated investment.
The result is a system designed to avoid piecemeal upgrades and instead deliver comprehensive, efficient transmission solutions that benefit the entire region.
The Game-Changing Role of GRID-C
Equally significant is the introduction of the Generation Interconnection Regional Deposit Charge, or GRID-C.
Previously, developers often faced unpredictable and project-specific network upgrade costs that could change dramatically as studies evolved. The old process incentivized the introduction of multiple generation interconnection requests to identify, through the study, the lower-cost sites. While some in the industry characterized the number of generation requests as speculative, it was the only approach that provided developers concrete cost information on projects competing for the demand for new resources, without knowing the cost of interconnection upgrades until the end of the study.
GRID-C replaces that uncertainty with fixed-rate, per-megawatt pricing, calculated in advance based on the upgrades identified through the consolidated planning assessments.
This structure provides numerous advantages. Because most of the costs of interconnection at planned sites are known at the entry to the study, it introduces cost certainty for project developers, allowing investors to understand their financial obligations early in the process as planned sites are much less exposed to upgrade cost uncertainty. It also ensures that the funds collected from new generation projects help offset the costs assigned to load, creating better alignment between those who benefit from the grid and those who help pay for it.
GRID-C also reinforces queue discipline, discouraging multiple project requests by requiring a financial commitment tied to the actual cost of building the proactively planned system. And by tailoring rates to specific subregions, the framework reflects a more accurate cost of constructing infrastructure in different parts of the SPP footprint.
Together, these elements represent a fundamental shift in how transmission development is financed and planned, providing a transformative level of predictability for investors considering large-scale energy projects across the central United States.
Collaboration Made the Process Possible
The success of this effort reflects years of collaboration among the diverse stakeholders across the SPP region.
APA is honored to have served as a voice for power generators in the stakeholder process and in the process at FERC from the origination of this concept in the SCRIPT until its ultimate approval. This could not have been achieved without the steadfast work of SPP staff and leadership, faithfully engaged state and FERC commissioners, and dedicated stakeholders who devoted their time and expertise to help developing this pioneering process.
The collaborative stakeholder process ultimately produced a proposal that balances reliability, economic efficiency, and investment certainty that benefits the entire region.
It is critical to note that the CPP concept will face the reality of unforeseen challenges as it is implemented. The formula for the GRID-C may require further scrutiny to ensure that it is appropriately allocating costs proportional with the benefits being received. The formula itself can produce increased costs for interconnection that are not driven by generation, but by load needs.
Furthermore, the contributions from generator developers for interconnection costs are significantly higher than the historical cost of interconnection in SPP. These contributions should be used to advance grid development in a way that benefits contributors or allow a reduction of the GRID-C amount if measured benefits are not keeping up with the GRID-C contribution amount.
Load interests are currently protected in the SPP cost-benefit analysis, and more work will need to be done to help ensure balance.
While FERC did not adopt the additional reporting requirements requested by APA and other advanced power organizations, SPP has committed to maintaining transparency regarding the costs associated with GRID-C and any future adjustments to the planning framework.
That commitment to transparency, cost and benefit alignment, as well as ensuring that the SPP region remains competitive for investment will be essential as the new system is implemented.
The Commission also signaled that the success of the CPP will depend heavily on how it is implemented. In a separate concurrence, Commissioner Chang highlighted the importance of the assumptions and calculations SPP will use to determine the GRID-C interconnection charge, which will dictate the dollar amount of the portion of transmission buildout that is assigned to new generation.[1] Stakeholders and regulators will need to watch closely to ensure the resulting costs remain transparent and reasonable and do not grow so large that they discourage the very investment the new planning framework is intended to support.
Looking Ahead
FERC’s approval of SPP’s consolidated planning process represents a milestone for the region’s energy future and serves as a new model for other regions.
By shifting transmission planning from a reactive model to a proactive, long-term strategy, the new framework creates the certainty and coordination needed to support large-scale investment in modern energy infrastructure. It provides developers with clearer pathways to interconnection, ensures transmission is built where it will be needed most, and delivers a more efficient grid for consumers across the SPP footprint.
For APA, this moment marks both an achievement and the beginning of the next phase of our work. We look forward to continuing our engagement as SPP moves into Phase 2 of implementation, ensuring that the process evolves in a way that maintains transparency, promotes efficiency, and supports the continued growth of the region’s energy economy.
Phase 2 includes exploration of creating more transparency and cost certainty for the interconnection of new loads in this era of critical load growth. Just as there was uncertainty in the cost and location of new generation, the advent of data center investment and electrification of oil and gas extraction has increased the need for proactive planning and increased certainty of load interconnection costs.
Discussions are underway regarding avenues to ensure that load and generation interconnection costs have sufficient guardrails on cost, benefits and affordability.
The future of the grid depends on thoughtful planning, collaboration, and a willingness to innovate. With this decision, FERC and SPP have taken a visionary step forward and have demonstrated that all three are possible and the entire region will benefit as a result.
The Advanced Power Alliance (APA) is an industry trade association that promotes the development of advanced energy technologies that deliver clean, reliable, affordable power for consumers, businesses and manufacturers across the United States.
Maya Nevels is the Senior Transmission Policy Analyst for Advanced Power Alliance.
Steve Gaw is the Senior Vice President of Infrastructure and Markets for Advanced Power Alliance.
[1] Chang, Commissioner Judy W., Concurring Statement, Southwest Power Pool CPP Order, Docket No. ER26-414-000, n.4 (FERC).