The future of the U.S. power system depends on how quickly new wires can be strung across miles of countryside. Analysts warn that grid capacity must at least double this decade to support electrification, yet major projects languish for years. A single state’s refusal to approve a line can derail a multistate project and raise costs and reliability risks for an entire region.
This isn’t just about steel towers; it’s about governance, equity, and trust. Delays in permitting threaten reliability, affordability, and decarbonization. Recognizing this, the Federal Energy Regulatory Commission (FERC) issued Order 1977 in May 2024 and a rehearing order (1977‑A) in October. These rules create a backstop permitting process that allows FERC to intervene when states can’t or won’t act. Understanding the backstop is now core for utilities, developers, and state regulators.
Expanding the grid unlocks remote wind and solar, reduces congestion, and improves resilience. The commission’s long‑term planning rule enumerates benefits, including reliability and cost reduction. Without new wires, renewable projects remain stranded, and existing lines become chokepoints that raise costs and blackout risk.
Why Projects Get Stuck
State utility commissions hold primary authority over transmission siting because the lines touch their lands. Some states lack the authority to permit lines that primarily benefit other regions; others take years or impose uneconomic conditions. Court rulings in the late 2000s further limited FERC’s ability to override states, leaving the backstop dormant for more than a decade.
When one jurisdiction delays, costs mount and investors retreat. Congestion on existing lines costs consumers billions and hinders the growth of renewables. The backstop aims to cut through these bottlenecks.
Congress tried to fix this through the 2021 Infrastructure Act, directing the Department of Energy to designate National Interest Electric Transmission Corridors. Once a corridor is designated, a developer can request a permit from FERC if a state denies or delays it. But the statute left federal procedures and obligations unclear.
What Order 1977 Does
Order 1977 fills that procedural gap. It respects state primacy by barring simultaneous state and federal filings: developers must wait at least one year after submitting to a state before entering FERC’s pre‑filing. This gives states a fair chance and prevents indefinite delay. The order also adds guardrails: a Landowner Bill of Rights requiring applicants to notify landowners of their rights, and an Applicant Code of Conduct obliging developers to document outreach and avoid coercive tactics, demonstrating good‑faith efforts.
The Landowner Bill of Rights requires applicants to provide clear notices of purpose, compensation, and dispute rights, helping landowners intervene and challenge valuations. The Code of Conduct compels developers to document outreach and prohibits misleading statements. Together, these guardrails aim to restore faith in fairness.
Order 1977 broadens disclosures: developers must now file Tribal Resources, Environmental Justice, and Air Quality and Noise reports. These ensure early consideration of impacts on tribes, environmental justice communities, and air quality, complementing rather than replacing the National Environmental Policy Act review.
Balancing State and Federal Roles
Although the rule expands federal involvement, it remains narrow. FERC may issue a permit only when one of five conditions is met: a state lacks authority; the applicant is not eligible; the state fails to act within a year; the state imposes infeasible conditions; or the state denies the application.
By requiring exhaustion of state processes, FERC positions the backstop as a last resort rather than a shortcut. Some commissioners argue this sequencing will spur negotiations and collaboration between developers and states, potentially shortening timelines even as it delays federal filings.
Engaging Communities and Tribes
One of the most transformative aspects of the rule is its emphasis on engagement. Applicants must file Public and Tribal Engagement Plans detailing outreach to landowners, environmental justice communities, and tribes. These plans must describe both completed and planned activities and demonstrate how feedback has shaped the project. Order 1977‑A strengthens tribal protections by requiring proposals for rights‑of‑way across tribal lands and affirming tribal sovereignty. It also obliges developers to explain how they will consult with tribes, obtain consent, and mitigate harms, and recognizes tribes’ rights to exclude non‑members. Building trust with tribes and communities is now a legal prerequisite and a practical strategy for avoiding litigation and delays.
FERC’s embrace of engagement acknowledges a painful history in which projects were sited without meaningful consultation. By tying engagement plans to permits, the rule encourages early dialogue rather than box‑checking. Meaningful consultation involves listening, modifying routes, and sharing benefits. Tribes and communities burned by past projects gain a stronger seat at the table, potentially reducing legal challenges.
Environment, Equity, and Corridors
Order 1977 makes environmental and equity considerations central. Applicants must estimate how projects will affect power‑sector emissions and identify environmental justice communities that might be harmed. These requirements mirror the Department of Energy’s National Interest Electric Transmission Corridors criteria – relieving congestion, lowering costs, and protecting sensitive resources. By forcing early confrontation with these impacts, FERC signals that lines must be technically and socially responsible.
The backstop cannot operate without National Interest Electric Transmission Corridors: the Department of Energy narrowed its initial ten corridors to three (Lake Erie–Canada, Southwestern Grid Connector, Tribal Energy Access) and entered Phase 3. A final designation unlocks federal financing and FERC authority, but the Department does not select routes; therefore, community engagement and route optimization remain essential.
The three proposed corridors were chosen partly because they connect high‑capacity renewables to load while minimizing impacts on sensitive resources. Phase 3 will refine boundaries, consult with communities, and assess whether these changes lower costs and emissions. The final corridors will shape investment for decades; therefore, companies should follow the Department’s consultation calendars closely.
Compliance, Planning, and Risk
Order 1977 overlaps with Order 1920, which requires 20-year regional transmission plans that emphasize resilience and congestion relief. Compliance filings are due mid‑2025. Aligning projects with these plans improves their chances, but expanded reporting and engagement obligations mean missteps can trigger delays or litigation. Developers should invest early in community relations, equity analyses, and legal counsel.
Aligning with regional plans is also a form of risk management. Projects aligned with long‑term plans are more likely to secure cost recovery and regional cost allocation. Order 1920 encourages the identification of projects that deliver multiple benefits, such as economic efficiency, reliability, and policy goals. Failing to anticipate these requirements could leave projects at risk of being stranded.
Building Trust to Build Faster
At its heart, the backstop is about trust. FERC advises developers to respect state processes, engage with communities, protect tribal sovereignty, and consider the environmental and social justice impacts. In return, the federal government offers a pathway when states can’t or won’t act. The Department of Energy’s rule doesn’t guarantee speed, but it provides a fair process that could make projects more resilient. Transmission is no longer just an engineering challenge; it’s a human one. Companies that cultivate genuine relationships and share benefits equitably will be better positioned to build the wires the clean‑energy transition requires.
As FERC and the Department of Energy roll out reforms, B2B leaders should lean in: host cross‑state dialogues, fund early engagement, integrate Order 1920 metrics into planning, and train teams on tribal sovereignty. Those who treat permitting as a participatory process will build faster and more enduring infrastructure.
Ultimately, this is a once‑in‑a‑generation opportunity to reimagine the grid. The stakes – reliability, affordability, climate, and sovereignty – are too high for inertia. Energy‑sector leaders must truly engage wholeheartedly with regulators and communities to help deliver the grid that the future demands.
