Solmar Insights
The Federal Energy Regulatory Commission (FERC) is taking initial steps toward incentivizing the deployment of grid-enhancing technologies, according to statements made during a Senate oversight hearing on July 22, 2026. Tasked with ensuring a reliable and economically efficient electric grid, FERC leadership described plans to incorporate such technologies into its existing framework for transmission owner incentives as cost pressures mount in the sector.
Key figures
PJM Interconnection is the largest and oldest US electricity market
FERC Senate oversight hearing held on July 22, 2026
GETs include dynamic line ratings and advanced power flow controllers
Grid-enhancing technology task force
FERC Chairman Laura Swett announced the creation of a dedicated task force focused on grid-enhancing technologies (GETs), with the intent to evaluate policy tools for accelerating their uptake across US transmission systems. These devices and systems, which range from dynamic line rating sensors to advanced power flow controllers and high-performance conductors, are being used with increasing frequency by utilities to optimize existing transmission infrastructure.
Chairman Swett noted that data from early GET deployments now demonstrate clear cost advantages, offering alternatives to conventional large-scale grid expansions. The practical effect could be significant, as bottlenecks, congestion costs, and overall capital expenditure requirements are priorities for both utilities and large energy buyers, particularly in regions with high interconnection demand.
FERC’s task force is expected to collect and analyze operational data, identify regulatory gaps, and collaborate with industry stakeholders to define best practices for broad-based GET adoption. Early focus areas include assessing how current incentive structures could better reward transmission owners for pursuing lower-cost technological solutions rather than simply expanding their asset base.
Economic incentives and federal authority
While the Federal Power Act limits FERC’s ability to require the use of specific technologies, the agency retains substantial authority to influence transmission planning and investment practices. Swett described how FERC can mandate economic analyses of GETs in the course of transmission project evaluations, effectively requiring utilities to justify their technology choices and consider the most efficient mix of new and existing assets.
Commissioner Judy Chang further explained that FERC’s incentives framework could be revised to explicitly account for the adoption of GETs. Applicants seeking higher rates of return on transmission investments could face new requirements to disclose what advanced technologies have been evaluated, and to explain if and why cost-effective solutions have not been deployed.
Senator Angus King highlighted the persistent “gold plating” incentive embedded in the current regulatory scheme, where transmission owners are most strongly rewarded for maximizing capital investment rather than delivering least-cost solutions. He suggested the need for mechanisms that align economic rewards with improved efficiency and ratepayer benefit, such as shared savings models or targeted performance incentives for grid enhancements.
Impact on transmission development strategies
The push to make GETs a more central part of the planning and cost-recovery process could reshape both near- and long-term transmission development. Transmission owners and developers often contend with state and regional processes that dictate grid expansion timing, siting, and technology choices. Federal guidance on GETs could streamline some aspects of this process by creating a national expectation for evaluating less capital-intensive solutions before pursuing new overhead lines or substations.
This anticipates not only accelerating the integration of new energy resources, including utility-scale solar, wind, and storage, but also meeting the rising needs of large load customers such as data centers and AI compute clusters. Efficient, lower-cost grid upgrades may lower barriers to interconnection, address congestion, and help avoid delays caused by lengthy permitting for new build projects.
Market operators and ISO/RTO stakeholders, particularly in capacity-constrained areas, will be watching closely as FERC formalizes incentive structures and compliance requirements. Over time, widespread uptake of cost-effective GETs could result in more responsive, flexible, and reliable grid operations, benefitting both supply- and demand-side participants.
PJM governance and sector-wide reform
PJM Interconnection featured prominently in the discussion, identified by Chairman Swett as the nation’s largest, oldest, and, by current performance metrics, most challenged electricity market. PJM’s governance, market rules, and planning processes are under review as FERC prepares for a technical conference to address potential reforms aimed at efficiency, transparency, and accountability.
Reform efforts are expected to scrutinize not only the procedures for integrating new technologies but also the alignment of PJM’s stakeholder model with evolving federal priorities. Improved governance could catalyze region-wide adoption of GETs and other cost-effective transmission solutions, furthering market competition and resource adequacy in an era of rising demand from digital infrastructure and electrification.
Sector observers anticipate that lessons from PJM’s experience may influence similar debates at other ISOs and RTOs, especially around how incentives and governance structures interact with the deployment of advanced grid tools. Successful integration of GETs could serve as a blueprint for broader system modernization across the US transmission landscape.
Stakeholder responses and next steps
Industry participants, including investor-owned utilities, independent transmission developers, and large end users, are expected to engage robustly as FERC develops new incentive frameworks and reporting requirements surrounding GETs. For institutional investors and transmission project sponsors, clarity on federal support measures will be central to future risk assessment and capital allocation.
FERC’s next steps are likely to involve issuing guidance for stakeholder consultation, publishing data and analyses from the new task force, and proposing formal rule changes to embed GET evaluation deeper into the regulatory process. Technical conferences, such as those soon to be held around PJM governance, will provide further venues for market participants to weigh in on practical and economic aspects of implementing these changes.
Buyers, developers, and financiers will be watching for signals about timeline certainty and cost allocation for transmission enhancements, particularly as more regions experience congestion and interconnection backlogs. Ultimately, the effectiveness of FERC’s approach will hinge on its ability to balance reliability, innovation, and ratepayer protection as the US grid faces mounting pressure from electrification and digital infrastructure growth.
What this means for buyers
For buyers, FERC’s intention to incentivize grid-enhancing technologies could accelerate cost-effective grid upgrades and improve transmission efficiency, particularly in markets facing interconnection bottlenecks. Institutional investors and project developers should closely track rulemaking and technical conferences, as future incentives may require advanced technology adoption to secure favorable rate treatments. PJM governance reforms and sector-wide priorities signal a shift toward rewarding efficiency, offering potential new strategies for capital allocation and load management. Expect increased scrutiny of transmission owner proposals, with a growing emphasis on transparency and demonstrated economic benefit for network improvements.
