FERC Order 881, intended to improve transmission line ratings, will require Independent System Operators (ISOs), Regional Transmission Organizations (RTOs), and Transmission Owners (TOs) to implement Ambient-Adjusted Ratings (AARs) on the transmission lines over which they provide transmission service. All requirements of FERC 881 must be implemented by no later than July 12, 2025.

The final FERC 881 rule does not mandate the adoption of Dynamic Line Ratings (DLRs). It does, however, require that TOs establish and maintain systems and procedures necessary to enable those wanting to use dynamic line ratings to do so.

What are Ambient-Adjusted Ratings?

Ambient-Adjusted Ratings are transmission line ratings that are more dynamic than static or seasonal ratings that are more common today. Because AARs are generally calculated hourly, their values frequently change, reflecting a near real-time forecast of ambient air temperature across a given time period.

They include adjustments for solar heating by day segments, where local sunrise and sunset times are used to determine daylight hours. Night-time periods are updated less frequently but at least monthly.

FERC 881 and the industry

Under FERC 881, TOs are responsible for calculating transmission line ratings in accordance with methodologies per good utility practice. They are also expected to share transmission line ratings and methodologies with their RTOs, ISOs and market monitors.

There can be no change without challenges, of course. In the May 2022 California ISO (CAISO) Order No, 881 Compliance discussion webinar, Andrew Ulmer, Assistant General Counsel at CAISO, spoke a bit about what they are doing internally to get ready for FERC 881:

“We’ve formed a team internally, and the team involves a number of different business units. It includes our operational and readiness group, our market policy team, grid assets, market network application services, operation engineering services, and our reliability coordinator services, among others.

We’ve got our EMS team working on this, as well as our enterprise project management office. We’ve gone through the order. . .[and] come to the recognition that it’s one that really touches a number of different functions that the ISO performs, many of our business processes. It touches many of our stakeholders—perhaps in different ways—but there really is an end-to-end aspect of this that we’re trying to think through and that’s why we try to get off with as robust a team as possible.”

For TOs, FERC 881 may require some heavy lifting to make improvements in infrastructure and processes, and also address related operational issues, including:

FERC Order 881 and climate change: Boosting reliability in the face of extreme weather

In June of 2022, FERC proposed two new rules aimed at making the grid more resilient against the increasingly extreme weather patterns associated with climate change. The first rule would require NERC to develop reliability standard modifications to require TOs to develop benchmarks, studies, and action plans related to climate change.

The second requires TOs to submit a one-time report outlining their policies and procedures for assessing extreme weather vulnerability and developing approaches for mitigation. In addition, the implementation of AARs will also provide much-needed support for TOs in the face of increasing extreme weather conditions.

What does FERC 881 mean for NERC compliance?

The North American Electric Reliability Corporation (NERC), a not-for-profit regulatory group, recommends that utilities review their current compliance documents and cross-reference them with the new FERC order. This will enable them to be prepared should they have to modify existing facilities’ rating methods and other affected NERC compliance documents to maintain compliance.

The PSC approach to FERC 881

At PSC, our mission is to help TOs prepare for and achieve FERC 881 compliance. Our proven TO models can help eliminate the need to pay for additional resources to support FERC 881 guidelines. With the July 2025 compliance deadline, we’re looking now to leverage our clients’ existing real-time and historical tools and data to provide approaches that will integrate and calculate for this infrastructure. Using real-time monitoring, we track SCADA and Advanced EMS application data 24×7. Our database modeling supports the ability to compute and understand new limits, thus improving transparency. We also offer comprehensive reporting to validate limits and logs, messages, and system alerts. 

For more detailed information about how to get started, please download our whitepaper which outlines the primary considerations to leverage when building a roadmap to achieve FERC Order 881 compliance by July 2025.

Looking ahead with PSC

At PSC, we help utilities and other energy industry stakeholders position themselves for the future with insight and expertise that supports transformation. Find out more about our Strategic Advisory Services and please contact us to get started on your next project.