The geothermal electricity sector continues its slow growth in the U.S., but the cost of next-generation technology has fallen sharply, setting the stage for wider expansion.
The 99 U.S. plants online in 2024 had a combined nameplate capacity of 3.97 GW, up 8% from 2020, a new report indicates.
Over the same time frame, the levelized cost of electricity (LCOE) for conventional geothermal technology held relatively steady at $63 to $74/MWh for flash plants and $90 to $110/MWh for binary plants. With reported geothermal power purchase agreements running in the $70-to-$99/MWh range, the authors say, these LCOEs are considered investable for a firm, high-capacity factor source of electricity.
While the LCOE for enhanced geothermal systems (EGS) remained significantly higher — as much as $200/MWh in 2024, depending on technology — it was close to $500/MWh just three years earlier.
Recent advances could lower the cost of EGS to the level of conventional geothermal technology by the mid-2030s, the authors write.
The details come in the “2025 U.S. Geothermal Market Report,” issued in January by the former National Renewable Energy Laboratory (NREL) and nonprofit advocacy group Geothermal Rising.
The levelized cost of electricity from enhanced geothermal systems decreased sharply from 2021 to 2024. | National Laboratory of the Rockies
The Trump administration recently renamed NREL the National Laboratory of the Rockies, an indication and reflection of its energy priorities. However, geothermal energy is among the few components of the renewable energy sector in favor with the current administration amid its push for more oil, gas and coal combustion.
Recent advances in oil and gas extraction techniques have brought down drilling costs in that sector. While geothermal drilling remains more expensive than oil and gas drilling, its costs have declined as well, which is important — drilling accounts for 29 to 57% of the total cost of developing a geothermal field, according to the report, which is an expansion of a 2021 NREL report.
However great its potential, geothermal was a minimally used resource in 2024, accounting for only 15,407 of the 4,308,634 GWh of electricity generated nationwide in all utility-scale sectors, according to the U.S. Energy Information Administration.
The 8% increase in U.S. geothermal generation from 2020 to 2024 was higher than the 7.4% increase for all types of utility-scale generation over the same period.
U.S. geothermal power generation is concentrated in the Southwest. | National Laboratory of the Rockies
Geothermal nonetheless remained one of the least used technologies — wood and other biomass fuels were burned to make three times as many watts as geothermal generated in 2024.
But the report makes an optimistic case for the potential of the earth’s heat to generate more electricity and to heat or cool more structures in the United States.
It indicates the number of geothermal projects in development increased from 54 in 2020 to 64 in 2024 as research improved replicable EGS processes with substantial decreases in drilling time.
As of late 2025, 29 states had enacted geothermal incentive policies, 17 of which encourage geothermal electricity production.
The authors further present geothermal as a component of U.S. energy security and independence: a potential power plant for data centers, a potential option for hybridization with thermal storage and a potential source of critical materials from the extracted underground brine.
A recent analysis by the laboratory estimated 27 to 57 TW of EGS potential at a depth of 0.62 to 4.3 miles across the continental U.S. Approximately 4.4 TW of that is in areas under federal management, but only about 1% of it would be considered economically developable.
California and Nevada remained the center of the U.S. geothermal sector as of 2024, the sites respectively of 53 and 32 of the nation’s 99 facilities.
Analysts with the Public Service Commission of Wisconsin said ratepayers are at risk of subsidizing data centers if We Energies’ proposed rate framework for data centers is given the go-ahead as proposed.
We Energies in late 2025 proposed a framework for customers requiring 500 MW or more to subscribe to dedicated resources, poised to be mostly natural gas at this point.
The utility proposed two types of electricity subscriptions for very large customers: The first would allow data centers to take all of a resource’s output provided they cover all costs associated with the resource; the second would allow data centers to count a resource toward their capacity needs. In the second case, data centers would foot the bill on 75% of the specified resource’s fixed costs; other customers would cover the remaining 25% plus all fuel costs. We Energies theorized that MISO market revenues would be enough to offset the expenses allocated to other customers (6630-TE-113).
Data centers that enroll would be bound to an initial, minimum 10-year contract, renewed thereafter in one-year increments. The rate styles contain early termination provisions where data centers could be billed for unrecovered capital costs if the resources don’t find other customers.
Staff with the commission flagged consumer protection weak spots in We Energies’ filing in late January. They said without stronger protection, utility customers could financially support data centers’ grid needs. They said the 75/25 allocation and 10-year contract term were cause for concern.
Andrew Field, a utility auditor with the commission, said We Energies didn’t capture the full range of market price volatility in its assumption that its other customers wouldn’t underwrite data centers. In testimony, he said We Energies didn’t “provide much detail supporting the specific future scenarios, or potential alternatives, upon which the provided analyses are based.”
Field said We Energies’ own analyses show the potential for costs to exceed benefits for the general rate base.
Even with the hopeful scenarios in its analyses, Field said We Energies found a net benefit for non-participating customers in only 67% of cases that include We Energies’ pending Foundry Ridge turbine project and 81% of the cases that include its planned Red Oak Ridge turbine project.
Tyler Meulemans, a utility financial analyst with the PSC, said he harbors concerns with the 10-year term, including a data center’s “ramp-up period,” when projected load isn’t fully realized. He said including the ramp-up period raises concerns over whether the agreement length is “sufficient to cover the costs incurred to provide service” of a massive data center.
Meulemans said when PSC staff requested a demonstration of revenue recovery would look like during a ramp-up period, We Energies’ analysis showed that a 10-year term “would not cover all costs.”
Two data center projects in We Energies’ territory — Microsoft’s AI data center campus in Mount Pleasant, Wis., and the Vantage/Oracle/OpenAI facility in Port Washington, Wis. — are to double We Energies’ load by 2030. We Energies’ investor presentations show the utility is prepared to spend $19.3 billion on new generation through 2029. The increase of more than $6 billion is due to increasing data center demand.
The Citizens Utility Board of Wisconsin and Power Forward Wisconsin, the latter of which is composed of clean energy groups, oppose the 75/25 allocation and have called on the PSC to make sure data centers pay for all the costs they cause.
Sierra Club’s Jeremy Fisher was critical of the utilities’ proposed rates and said they relied on assumptions that are too rosy.
Fisher said the rate structures “appear to have been negotiated and designed with the company’s new data center customers, Microsoft and Vantage/Oracle,” and rely on the assumptions that immense data centers will become profitable and future customers would have massive electricity needs and the means to finance them.
Fisher asked what happens if the AI boom fizzles.
We Energies “may look at these customers as an enormous opportunity to increase its rate base and expand operations, but the purpose of the tariffs must not only be to provide for reasonable allocation under optimistic conditions but ensure that incumbent ratepayers are protected under adverse scenarios,” Fisher said in testimony to the PSC.
Fisher also said the rates would lead to an “inconsistent and balkanized planning process that should be deeply concerning to regulators in assessing actual resource requirements.”
Richard Stasik, vice president of regulatory affairs of We Energies’ parent company, said PSC staff and interest groups ignored We Energies’ statutory obligation to serve all customers. He said the Sierra Club didn’t quantify risks wrought by data centers and didn’t acknowledge that the situation would be riskier without a dedicated rate schedule.
Stasik said We Energies existing customers would pay at least $1.5 billion in additional capital investments if large customers were to take service under the utility’s existing rate designs.
ACEG said the reforms are starting to improve outcomes in several regions, but rising demand from data centers, manufacturing and electrification are increasing the cost of delay, especially where planning processes remain incremental or reactive.
“Progress is real, but it’s uneven — and demand growth means delay now carries real costs for customers,” ACEG Executive Director Christina Hayes said in a statement. “Where regions have embraced proactive, long-term planning, we’re seeing better results. Where planning remains fragmented, reliability risks and costs increasingly show up in household electricity bills.”
Grades assess performance at the regional level and do not assign responsibility to single institutions, instead reflecting the collective actions of utilities, regional planning organizations, states and other stakeholders. To earn top grades, regions must adopt proactive, long-term, scenario-based planning that evaluates multiple system benefits, integrates regional and interregional needs, and delivers transmission at the pace required to meet rising demand.
CAISO, MISO and SPP continue to show the benefits of proactive, long-term regional planning. SPP’s Coordinated Planning Process, once approved by FERC, would be an important reform that merges transmission planning and generator interconnection planning, the report said.
ISO-NE, NYISO and PJM have shown meaningful improvement due to FERC Order 1920 compliance filings and greater engagement with states.
ERCOT got a C, with the report highlighting the Permian Basin Reliability plan to electrify oil and gas drilling and data centers, which was released in July 2024 with options for 345-Kv and a 765-Kv portfolio. The Texas PUC picked the 765-Kv option in April 2025. While Texas has seen plenty of transmission planned, the report noted it still is done in a “siloed” style, which kept it from a higher grade.
Many regions — including all the non-RTO regions — “continue to face significant gaps in both regional and interregional planning frameworks,” the report said, “In these regions, transmission development often occurs through individual utility investments or ad hoc coordination rather than durable, region-scale planning processes, limiting the ability to fully capture systemwide benefits.”
The West, which is split into three regions, is meeting under the Western Transmission Expansion Coalition (WestTEC), a voluntary interregional planning process that the report called “one of the best interregional transmission planning practices in the country.”
The first report card from ACEG came out in 2023 and ranked the regions before Order 1920 was issued, while the second one from 2024 did not change the grades and checked in after that order. Now, the report takes the requirements from Order 1920 and adds a new focus on interregional transmission.
Load growth forecasts have changed significantly since the last report, with Grid Strategies’ summary of nationwide, five-year peak load forecasts going from 24 GW three years ago to 150 GW in its most recent update. Load growth is affecting transmission development, with FERC saying it was the main driver for 1,000 miles of new facilities in 2024.
“While today’s load growth can tempt a crisis‑response mindset focused solely on short‑term fixes, the industry must move beyond ad hoc solutions and embrace long‑term regional and interregional planning,” the report said. “Proactive, holistic long‑term planning that also accommodates near‑term needs has proven to deliver the lowest costs to consumers. It captures economies of scale that ‘just‑in‑time’ projects miss and enables high‑capacity upgrades to come online ahead of demand.”
The report looked at interregional planning and gave the country an overall “C-minus” that reflects continued reliance on voluntary coordination rather than a formal requirement for regions to implement interregional planning best practices capable of finding the highest value projects.
“The takeaway is not that nothing is working,” Hayes said. “Transmission planning works when it’s proactive, coordinated and long term. The challenge now is scaling those successes fast enough — across and between regions — to keep electricity affordable and reliable for all Americans as demand continues to grow.”
Under the agreement, I&M will shift its focus from building several new natural gas plants to generation sourced by a mix of gas plants, power purchase agreements, wind, solar and battery storage. The plan also highlights a proposal to develop a virtual power plant program that would allow customers to connect their personal generation to the grid.
I&M says the plan is necessary due since electricity demand is expected to double from 2025 to 2030.
New Orleans City Council Bans Data Center Development for 1 Year
The New Orleans City Council voted unanimously to ban the construction of data centers in the city for one year.
The special meeting to consider the future of data center development projects was called shortly after news broke about a proposed data center in New Orleans East. The ban period will provide the council with time to define data centers and devise a way to effectively prohibit them.
Hours after the council meeting concluded, the developer behind the New Orleans East project pulled his zoning permit.
The Environment and Natural Resources Committee voted 8-4 to advance a proposal that would establish a superfund for large fossil fuel companies to pay for infrastructure repairs, resiliency efforts and other costs in communities disproportionately affected by flooding and other disasters.
It would cost about $4 million to fully implement the program. Additional staff would also be required, though the exact number would depend on the specific plan.
State Further Behind on Emissions Goal than Expected
Modeling done by the University of Maryland’s Center for Global Sustainability indicates the state is not on track to meet its mandated 60% reduction in greenhouse gas emissions by 2031.
The data suggest state and federal policies currently on the books will reduce globe-warming emissions only 42% from 2006 levels. The same group of researchers predicted in 2023 that the state would reduce its carbon emissions 50% by 2031 — still shy of the 60% goal set by law, but better than the new estimate.
In a statement, the Department of the Environment said it still has five years to “make smart decisions, do the right thing and take advantage of technological advances.”
Utilities Back off Plan to Charge Customers Interest on Bill Reductions
National Grid and Eversource, the state’s largest gas and electric companies, said they will forgo all interest on the bill reductions requested by Gov. Maura Healey. Berkshire Gas and Unitil agreed to do the same.
Healey requested the utilities shave customer bills by 10% in February and March amid a second winter of sky-high heating charges and was frustrated the companies had planned to collect interest. Initially, the companies said they would forgive two months of interest but planned to collect the remaining deferred charges with interest up to the prime rate of 6.75%.
Consumers Energy Proposes Storage Project on Former Coal Site
The Hampton Township Planning Commission will review a special use permit request from Consumers Energy for a battery energy storage system at the site of the former Weadock coal-fired generation facility.
The $70 million Weadock Battery Energy Storage System would occupy approximately 5 acres and would include a 45-MW storage facility with 36 lithium iron phosphate batteries. The township is already home to part of an 80-MW solar farm on Consumers Energy property.
The commission will hold a public hearing Feb. 12.
The House of Representatives voted 62-5 to advance a measure that would ask voters to restrict eminent domain in a state constitutional amendment.
The legislation asks voters to approve an amendment clarifying eminent domain “may not be exercised for the purpose of transferring private property to a non-governmental entity solely to promote economic development or increase tax revenue without the provision of a public use.” The measure would not ban eminent domain completely.
If the Senate approves the measure, it will go to voters in the Nov. 3 general election.
Bill to Boost Local Approvals of Solar Projects Advances
The Senate voted 21-17 to advance a bill that would set up a framework for siting solar projects that localities could follow and prohibit the premature rejection of development.
The bill is not a mandate for localities to approve projects, but it would keep them from outright barring the projects from even applying for permits. Localities would still be able to approve or withhold permits.
EnergySolutions, the company that owns the decommissioned Kewaunee Power Station, said it plans to bring nuclear power generation back to the site.
EnergySolutions submitted a notice of intent to the Nuclear Regulatory Commission on Jan. 15, confirming plans to file for major licensing action for new nuclear power generation at the Kewaunee plant site by June 2028. The plant closed in 2013 and began major dismantlement in 2022.
If the site comes back online, it would be one of only two nuclear facilities in Wisconsin and the first to open since 1974.
The United States officially left the Paris Agreement – for a second time – on Jan. 27, becoming the only country in the world to abandon the international commitment to slow global warming.
The departure from the climate accord comes one year after President Donald Trump signed an executive order to begin the process of withdrawal.
The U.S. is currently the planet’s second largest climate polluter after China.
FERC authorized Transcontinental Gas Pipe Line Company to proceed with its Southeast Supply Enhancement Project, a major expansion of its existing interstate natural gas transmission system spanning Virginia, North Carolina, South Carolina, Georgia and Alabama.
The order grants Transco authority to construct and operate approximately 55 miles of new large-diameter pipeline, along with significant compressor station upgrades and related facilities.
FERC staff concluded that while construction and operation would result in some environmental impacts, the effects would be reduced to less-than-significant levels with mitigation measures in place.
The U.S. District Court for the District of Massachusetts ruled the Department of Energy violated the law when it formed the Climate Working Group.
The court issued a judgment that said the creation of the group, which is comprised of five climate change skeptics, violated the law that governs how federal advisory committees work. The Environmental Defense Fund and Union of Concerned Scientists sued the DOE in 2025 for convening the working group without public meetings or notice.
Dominion Energy’s $11.2 billion Coastal Virginia Offshore Wind project off Virginia Beach’s coast reached a major milestone on Jan. 21 with the installation of the first turbine.
The tower was installed less than a week after the utility won a preliminary injunction in federal court, allowing it to resume construction on the project.
TerraForm Power, an affiliate of Brookfield Asset Management, announced the acquisition of a 1.56-GW solar project in Illinois from its original developer, Hexagon Energy.
The Steward Creek Solar project recently sealed a 600-MW interconnection agreement between TerraForm, Commonwealth Edison and PJM.
BOSTON — While there is near-universal recognition that New England will need to add a significant amount of new generation over the next two decades, conflicting political and market forces have created major uncertainty about what the next wave of generation projects will look like.
This uncertainty extends to how the region will spur the development needed to meet demand growth, several speakers said at a Northeast Energy and Commerce Association conference on power markets in Boston on Jan. 29.
The scale of the need could be substantial: ISO-NE forecasts peak load roughly doubling by 2050, and decarbonization would require additional clean energy to replace much of the existing fossil fuel fleet.
Incentivizing new generation solely through the wholesale markets may be a difficult proposition. Although energy affordability has dominated policy discussions over the past year, wholesale market prices had remained relatively low until the past two months, which have brought a major increase in energy costs due to sustained cold weather. (See Cold Weather Drives Record December Energy Costs in New England.)
Dan Dolan, president of the New England Power Generators Association, said there has been a “dramatic disconnect” between consumer costs and wholesale market prices. For generators relying on capacity and energy revenues, “if anything, there’s a revenue crisis.”
With consumer prices already high, the increased energy and capacity prices needed to spur new development could lead to political backlash and caps on market prices.
This dynamic has occurred in PJM, where “we’re just now seeing these markets shifting from being long on capacity to being more at equilibrium,” said Ben Griffiths of NRG Energy. “It’s not clear that the prices that [power developers] would require to bring in new entry are actually politically feasible.”
If market prices alone are not enough to bring new generation online, the New England states could assume an even larger role in the procurement of new generation and capacity. But continued reliance on state power procurements would bring its own set of difficulties.
Connecticut’s 10-year power purchase agreement with the Millstone nuclear plant has demonstrated some of these challenges. The difficulty of reconciling PPA costs through rates has led to major swings in the monthly costs to consumers, and Connecticut officials have been pushing for other states to shoulder some of the plant’s costs after the current contract expires in 2029.
Griffiths noted that former ISO-NE CEO Gordon van Welie had pushed the states to take on a larger role in capacity procurement through bilateral contracting.
He added that the region could consider capacity market changes aimed at increasing revenue certainty, such as altering the demand curve to stabilize prices or reintroducing some version of a price lock for new capacity.
But he expressed skepticism about the long-term sustainability of the proposal by the PJM state governors and the White House’s National Energy Dominance Council for a one-time “backstop” auction to procure 15-year contracts with new capacity resources. (See Government-proposed ‘Backstop’ Auction to Test PJM Stakeholder Process.)
“It doesn’t feel long-term sustainable to have bifurcated markets that are providing the same benefits in real time,” Griffiths said, adding that he is “increasingly skeptical of the approach of trying to move all the money out of the capacity market.”
Bob Ethier, current PJM board member and former vice president of system planning at ISO-NE, stressed the need for longer-term solutions to high costs.
“The tension that I see is that there are times where we can do things in the short term that will lower bills but will hurt the market’s functioning in the long run,” he said, emphasizing the importance of maintaining long-term entry and exit signals in the market.
Multiyear price locks for capacity could help reduce year-to-year price volatility, he said, adding that states may be better situated to pursue this strategy than RTOs. He emphasized the need to have these conversations prior to price spikes.
Once a crisis hits, like in PJM, “all we can do is ride [it] out, tweak things around the edges and hopefully learn from it for the next one.”
Policy Pickles
Conflicting objectives between federal and state policies have also added significant challenges and uncertainty to resource development, several speakers said.
“We’re in a pickle in the region for what we can build and what is a sound investment,” said Matt Nelson, principal at Apex Analytics and former chair of the Massachusetts Department of Public Utilities. “We’ve lost some tailwinds and are picking up a lot of headwinds when it comes to clean energy policy.”
Despite the load growth projections and increased demand over the past two years, there is a relatively small amount of generation in the ISO-NE interconnection queue. The first iteration of the Order 2023 cluster study process, initiated by ISO-NE in October, includes 5,632 MW of storage, 355 MW of solar and the 1,200-MW SouthCoast Wind project, which faces considerable challenges from the Trump administration. (See Storage Projects Dominate ISO-NE Transitional Cluster Study.)
Nelson said each new resource category has its own drawbacks: New gas generation seems unlikely with the region’s winter gas constraints and grid’s current “overreliance” on gas; new nuclear looks to be at least 10 years out; the federal government appears to have taken offshore wind off the table; and large-scale solar development faces questions about the loss of federal incentives and a potential capacity revenue hit from ISO-NE’s proposed accreditation changes.
To address load growth amid so much uncertainty about sources of new development, the region must build consensus around a cohesive plan, Nelson said. He added that distributed solar and storage may play an increasingly large role over the next few years.
“State programs are about the only thing left where clean energy resources can get an incentive,” he said.
Aaron Lang, a lawyer focused on clean energy development at firm Foley Hoag, said renewable developers are dealing with “a mountain of uncertainty” related to tariff policy and other potential state and federal policy changes over the past year.
“The pressure is really on the states to do a lot of stuff,” he added, while expressing some optimism about Massachusetts’ efforts to establish a new consolidated permitting and siting process for clean energy resources.
The new process stems from climate and energy legislation passed by the state in 2024. Under the new rules, developers must apply for consolidated state and municipal permits, with the permitting review process limited to 15 months for large projects and 12 months for smaller projects.
The law requires the state to promulgate final regulations by March 1. The state plans to start processing projects through the new process in July.
While there may be some short-term “bumps in the road,” the new process should provide long-term benefits for resource development, he said. “The idea of a consolidated permit is an excellent idea.”
Consumer Cost Drivers
Over the past couple years, New England has seen electricity prices rise faster than inflation, though the inflation-adjusted rate of increase has been relatively modest for most of the region, said Todd Schatzki, principal at the Analysis Group. When accounting for use and rates, customer costs have fallen since 2010 but have risen since 2020, he said.
He emphasized that the cost increases are not felt equally by all customers, with larger impacts on residential customers who have not seen wage growth in line with inflation.
Sandy Grace, vice president of U.S. policy and regulatory strategy at National Grid, presented a cost breakdown of a typical Massachusetts residential electric bill for November. The main cost categories were energy supply (41.3%), distribution (21.4%), transmission (14.9%), energy efficiency (7.6%), net metering (4.6%) and utility fixed charges (4.4%).
Example electric bill for a National Grid residential customer in Massachusetts | National Grid
“It really does require a partnership across sectors to address these costs,” she said.
Rhode Island Public Utilities Commission Chair Ron Gerwatowski focused much of his remarks on the rise of transmission rates in the region.
Asset condition spending, or investment to address degradation of existing transmission infrastructure, has risen significantly in recent years and makes up the bulk of new regionalized transmission spending in ISO-NE. The rising costs, coupled with the limited regulatory scrutiny the spending receives, has prompted efforts to establish internal asset condition review capabilities at ISO-NE.
While this role would not be a regulatory entity, it would be intended to increase transparency into projects and provide information that could be used by third parties to challenge project costs with FERC.
“Quite frankly, it may not be enough,” Gerwatowski said. “We need the transmission owners to temper their appetite for investment in asset condition projects.”
If transmission owners do not scale back their spending, the states may be forced to try to step in and do it for them, he said, noting that states “still control both the method and the timing” of how transmission rates are recovered.
Instead of allowing the quick recovery of transmission spending as pass-through costs, the states could require the recovery of transmission costs through the full base rate case process, he said.
Introducing regulatory lag “could give the financial folks an incentive to push back” on asset condition spending, he said.
If state regulators have little or no confidence in the asset condition planning and development process, he added, “What other options do we have?”
American Electric Power and Springdale Energy will pay ReliabilityFirst a combined $180,000 in penalties for violations of NERC’s reliability standards, according to settlements between the regional entity and the utilities approved by FERC.
NERC submitted the settlements Dec. 30, 2025, in its monthly spreadsheet notice of penalty, along with a separate nonpublic SNOP regarding violations of NERC’s Critical Infrastructure Protection standards (NP26-3). FERC indicated in a Jan. 29 filing that it would not further review the SNOPs, leaving the penalties intact.
AEP’s settlement, carrying a $150,000 penalty, concerned PROC-026-1 (Relay performance during stable power swings), which was in effect from 2018 to 2024. The standard has been replaced by PRC-026-2, but the violation by two AEP subsidiaries, Ohio Power and Indiana Michigan Power, occurred while the earlier version was in effect, according to a self-report submitted by the utility in October 2022.
According to the settlement, PJM notified AEP in December 2020 that it had added the utility’s 765-kV Sorenson-Marysville line to its list of elements covered by PRC-026-1. Requirement R2 of the standard says a transmission owner must ensure the load-responsive protective relay settings on a transmission line meet the criteria in the standard within 12 months of being notified of the line’s inclusion.
The Sorenson substation is owned by Indiana Michigan Power, while the Marysville substation is owned by Ohio Power, and both are managed by separate engineers. While the engineer overseeing the Marysville facility reviewed the line relays within the 12-month period, the Sorenson facility’s manager did not review its relays until August 2022, about eight months after the deadline. Two of the relays were found to be out of compliance and require adjustment.
RF determined the root causes of the violation were “ineffective internal controls and workflow tools to ensure evaluations were completed in compliance with PRC-026-1,” the RE wrote in the SNOP. AEP had flagged the Sorenson relays within its tracking system, but no one was assigned to complete the evaluation and no follow-up notifications were issued to ensure completion.
RF also observed a lack of coordination between AEP’s subsidiaries, with the engineer from Indiana Michigan incorrectly assuming Ohio Power’s engineer would complete the evaluations on the Sorenson facility as well as the one in Marysville.
The RE assessed the violation as posing a moderate risk to grid reliability: greater than minimal because an extra-high voltage line was affected, the evaluation was late and the relays eventually were found to be noncompliant; but not serious or substantial because of the “limited scope of the noncompliance.” RF acknowledged that AEP performed an extent of condition review across the footprint of all its operating companies and found no other instances of noncompliance with PRC-026-1 R2.
AEP’s mitigation activities included performing the required evaluations of the Sorenson-Marysville line, along with the extent of condition review and creating a unified process for evaluating relays for PRC-026 compliance. The utility also updated its tracking system to specify the due date, estimated completion date and personnel assigned to each task.
Vendor Failed to Ensure Springdale’s Compliance
Springdale’s settlement stemmed from a violation of PRC-025-2 (Generator relay loadability). The utility notified RF in August 2022 that it was in violation of requirement R1 of the standard, which requires generator owners to apply the appropriate settings to their load-responsive protective relays “while maintaining reliable fault protection.”
RF observed that Springdale’s violation “was a continuation of a prior noncompliance” that the utility had failed to fully mitigate. Springdale reported the initial noncompliance in February 2020, telling the RE that it had failed to ensure the correct relay settings on three of its five generating units. To mitigate the issue, the utility hired a vendor to update the relay settings.
A month later, the vendor reported it had completed the updates; based on this report, Springdale reported to RF that mitigation was complete. However, when the utility retained a new vendor to review relay settings two years later, the second vendor discovered the settings still were not in compliance.
Springdale launched an investigation into the original vendor, which reported that “the technician who performed the work had properly changed” one relay’s settings but had incorrectly changed another. Six relays were affected by the oversight. The original vendor returned to fix the error in May 2022, but the second vendor reported in June that one of the units still was not compliant, affecting two relays. These finally were brought into compliance in November 2022.
RF determined that the root cause of the second noncompliance was vendor oversight, because the utility did not validate that settings changes had been implemented correctly. The RE assessed the violation as a moderate risk, observing that although the noncompliance lasted more than three years and the size of the settings changes increased the risk of an unnecessary trip, the limitation to three of five generating units “somewhat” reduced the potential magnitude of harm. The earlier violation did not constitute a reason to aggravate the penalty, RF added.
Springdale’s mitigation efforts included updating its vendor contracts to require engineering review of changes within 48 hours and vendor draft reports within 30 days after completion of work. The utility also implemented a vendor quality assurance process to ensure Springdale staff review the vendors’ work, and a requirement that the NERC compliance manager review the vendor draft report to check that it includes all necessary information to demonstrate compliance.
CAISO released its first mandatory report under the California assembly bill that paves the way for an independent regional organization to assume responsibility over the ISO’s energy markets.
Under AB 825, CAISO must submit an annual report to the California governor and Legislature about the ISO’s various initiatives and decisions. Gov. Gavin Newsom signed the law in September 2025, and CAISO submitted the first report to the Legislature on Feb. 1, according to a news release.
“The ISO appreciates the commitment by Gov. Newsom and the Legislature to support independent governance of the real-time and day-ahead regional electricity markets that benefit consumers across the West,” CAISO CEO Elliot Mainzer said in a statement. “We look forward to continuing to work with the state and stakeholders throughout the region to help make that new governance framework a reality.”
AB 825 allows for the creation of an independent organization to oversee CAISO’s Western Energy Imbalance Market and soon-to-be-launched Extended Day-Ahead Market. The bill authorizes CAISO and California’s investor-owned utilities to join the organization.
In the AB 825 report, CAISO listed activities from the past year, including federal tariff proceedings, policy initiatives, decisions, market activity and transmission planning.
The report lists suggested enhancements to congestion revenue rights, initiatives to address reliability needs and uncertainties between the day-ahead and real-time market, new resource adequacy rules, storage enhancements and greenhouse gas coordination, among other initiatives.
CAISO also is working to “extend participation in the day-ahead market to the [WEIM] entities in a framework similar to the existing WEIM approach for the real-time market. EDAM will improve market efficiency by integrating renewable resources using day-ahead unit commitment and scheduling across a larger geographic area,” according to the report.
The report notes that CAISO intends to seek approval from its Board of Governors for its 2025/26 transmission plan in May 2026.
Under the 2024/25 transmission plan, CAISO received approval for 31 projects valued at $4.8 billion, 28 of which are for reliability purposes for $4.6 billion. The ISO estimated it needs 76 GW of additional capacity to meet increasing building electrification and electric vehicle loads. (See CAISO Approves $4.8B Transmission Plan to Support 76 GW of New Capacity.)
NYISO began what is expected to be a yearlong effort of revising its Reliability Planning Process at a Transmission Planning Advisory Subcommittee meeting Jan. 20.
“This is the best opportunity, if you have more concrete feedback, especially any specific suggestions so that we can consider those as we consider revisions before we roll them out,” said Ross Altman, NYISO’s senior manager of reliability planning.
The existing process uses a single base case to determine whether the transmission system meets all reliability criteria. Base case assumptions are identified in May, finalized over the summer and voted on in fall. The final reliability need assessment is issued in late fall. This goes hand-in-hand with the Comprehensive Reliability Plan (CRP), which considers system conditions a decade into the future.
“The only specific feedback we’ve received so far to process revisions is to consider a longer horizon,” Altman said. “There was a suggestion of 15 years. We welcome folks’ thoughts on that.”
Altman said the use of base case means the ISO needs to use the most conservative assumptions to account for growing uncertainty across all elements of grid planning. (See NYISO’s 2026 to be Dominated by Reliability Concerns.) The use of a single base case when reliability margins are tight can mean “flip flopping” between having and not having a reliability need.
Several stakeholders said they were concerned with moving away from a single base case to multiple base cases or scenarios that might trigger a reliability need. Representing Multiple Intervenors, Mike Meager asked Altman to clarify how the ISO would weigh different scenarios or circumstances probabilistically.
Altman said it was difficult this early in the process for the ISO to come up with a “true stochastic” look at probabilities.
“Not declaring needs on outliers is something we’re thinking about how to accomplish,” Altman said.
He said the process must maintain that reliability needs be based on criteria, and he added that multiple combinations of system conditions could more accurately reflect the changing grid. He stressed that the ISO was committed to “open and transparent” stakeholder involvement in revising the process.
The ISO is planning to review key study assumptions for the 2026 reliability needs assessment study with a particular focus on load uncertainty, aging generation, emergency assistance and generator outage rates.
Howard Fromer of Bayonne Energy Center asked how the ISO planned to stick to a 10-year planning horizon for the CRP, given that it was planning on folding multiple forecasts into the reliability process.
“How do we prevent that flexibility you’re looking for from swamping the competitive market, which is what we designed to achieve whatever our reliability requirements are?” Fromer asked.
Altman said that was always a risk when using a decadelong planning horizon for a one-year market. He suggested that the issue be separated from short-term reliability needs planning.
Fromer replied that it deserved consideration because the ISO could force a lot of unnecessary infrastructure investment.
Another stakeholder asked whether NYISO would consider changing some of its base case inclusion rules to be more realistic rather than conservative. Meager said he agreed and wanted the ISO to seriously consider how realistic its assumptions are.
“It’s not difficult to show some reliability criteria will be violated … if there’s no bounds or restrictions or constraints on what assumptions the NYISO can pick and choose to use each year,” Meager said.
Altman replied that the ISO is indeed considering the issue.
Alex Novicki, representing Avangrid, requested that extreme weather events be accounted for in the base case because, he said, NERC was going to try to account for them in upcoming resource adequacy standards.
Meager also questioned the ISO’s timeline for potential changes.
“What you are contemplating are some of the most significant changes to the Reliability Planning Process we have ever considered, with huge impacts moving forward,” Meager said. “There’s not a lot of meat on the bones before us right now. The idea that we’d be voting on tariff changes in a couple months is incredibly ambitious, if not highly unlikely.”
