A wave of federal rulemaking and public-land policy changes is pushing grid operators, solar developers, and state regulators across the American West to rethink how they plan, approve, and pay for the transmission lines needed to deliver solar power. The shift is not abstract: new federal rules emphasize 20-year planning horizons, tighter interconnection timelines, and more defined approaches to cost allocation for new transmission. Together, these changes help explain why Western states are moving to plug more solar capacity into the grid.
Federal Rules Rewire Transmission Planning
The single biggest regulatory shift behind the Western solar rush is the Federal Energy Regulatory Commission’s Order No. 1920, a final rule formally titled “Building for the Future Through Electric Regional Transmission Planning and Cost Allocation.” Filed under Docket No. RM21-17-000, the rule compels transmission providers to conduct long-term regional planning over a 20-year horizon, use scenario-based forecasting to account for changing generation mixes, and establish ex ante cost allocation methods so that the bill for new lines is split before construction begins rather than fought over afterward. For solar-heavy Western grids, where generation sites sit hundreds of miles from population centers, that combination removes a key bottleneck: the years-long argument over who pays for wires nobody wants to finance alone.
FERC’s planning explainer for Order No. 1920 spells out how the rule changes planning horizons, scenario requirements, transparency obligations, and cost allocation procedures. The practical effect is that grid operators can no longer default to short-term, reliability-only studies that ignore the flood of solar and storage projects seeking connections. Instead, they must model plausible futures in which renewables account for a large share of generation and then identify the transmission investments needed to serve those futures. That shift from reactive to anticipatory planning is a major reason Order 1920 is central to the West’s push to connect more solar to the grid.
Clearing the Interconnection Backlog
Planning new lines means little if solar projects cannot physically connect to the grid. Nationally, interconnection queues have swelled with solar and storage proposals, many of them speculative. Data compiled by Lawrence Berkeley National Laboratory in its Queued Up: 2025 Edition, covering data through the end of 2024, provides standardized queue metrics across ISOs, RTOs, and many non-ISO balancing areas representing approximately 97% of installed capacity. The report tracks total queued solar and storage capacity, withdrawal rates, and time-in-queue trends, painting a picture of a system clogged with applications that often sit for years without resolution.
FERC attacked that problem directly with Order No. 2023, a final rule titled “Improvements to Generator Interconnection Procedures and Agreements” under Docket No. RM22-14-000. The rule shifts regions toward cluster-based interconnection studies, tightens study deadlines with financial penalties for grid operators that miss them, and raises readiness and financial commitments from developers to deter projects that exist only on paper. A follow-on order, Order No. 2023-A, clarified acceptable forms of financial security, refined rules around the option to build and cluster-related upgrades, and set readiness requirements for regions that adopted cluster processes early. The intent, as FERC’s own interconnection materials emphasize, is to reduce backlogs, improve certainty for developers, and open access for new technologies. For Western solar developers, the practical result is a faster, more predictable path from application to energization.
Public Lands and Permitting Speed
Federal transmission and interconnection reforms address only part of the problem. In the West, much of the best solar resource sits on land managed by the federal government. On December 20, 2024, the Interior Department finalized an updated Western Solar Plan designed to make solar project permitting more efficient and to offer greater clarity for developers seeking to build on public lands. According to the department’s official announcement, the updated plan establishes where solar development is appropriate, reducing the site-by-site review burden that has historically delayed projects by years and steering proposals toward lower-conflict zones.
The timing matters. Without clear land-use rules, developers who win interconnection rights under FERC’s reformed queue process could still face open-ended permitting delays on the ground. The Western Solar Plan is meant to close that gap by aligning federal land policy with the speed that reformed grid rules now demand. Whether non-ISO balancing areas in the interior West can match this pace remains an open question, since many of those smaller grid operators lack the staff and modeling tools that large ISOs use to run cluster studies efficiently. That mismatch between federal ambition and local capacity is the tension most coverage of the solar race overlooks, and it will determine whether planned transmission lines actually deliver power from new desert solar hubs to urban load centers.
Demand Pressure From Data Centers and Crypto
The urgency behind these policy changes is not driven by climate targets alone. According to the U.S. Energy Information Administration, solar power is the fastest-growing source of new electric generating capacity in the United States, with growth concentrated in Texas, where data centers and cryptocurrency mining are driving strong power demand increases. The agency notes that solar generation is expected to rise substantially in 2025 as new utility-scale projects come online, reflecting how quickly large loads are reshaping regional power markets. That growth trajectory is especially relevant for Western states courting the same types of energy-intensive facilities.
Data centers and crypto mines typically require large, round-the-clock power supplies and favor locations with access to relatively low-cost electricity and robust transmission. The Western grid’s vast solar potential makes it an attractive candidate for such investments, but only if lines can be built fast enough to move power from remote generation sites to the edge of metropolitan areas. The combination of long-term transmission planning, streamlined interconnection, and clearer public-lands siting is therefore not just about decarbonization; it is also about economic development and grid reliability in the face of rapidly rising demand from digital infrastructure. States that can align these elements stand to capture new industries, while those that cannot may see projects migrate to better-prepared regions.
State-Level Coordination and the Road Ahead
Federal rules and land-use frameworks set the stage, but state agencies ultimately decide how many projects move from paper to reality. In the West’s largest power market, California’s policy ecosystem illustrates how state institutions translate national reforms into concrete decisions. The state’s central government, reachable through the main California portal, oversees a web of energy and environmental agencies that must coordinate on transmission corridors, permitting, and procurement targets. Their choices influence not only in-state solar development but also regional flows, because California increasingly relies on imports from neighboring states to balance its grid during peak hours and seasonal swings.
Within that framework, utility regulation plays a pivotal role. The California Public Utilities Commission, which can be contacted through its own regulatory interface, is responsible for approving utility transmission investments, overseeing interconnection tariffs for distribution-level projects, and integrating federal rules like Orders 1920 and 2023 into state-jurisdictional processes. As Western utilities propose major transmission projects to connect new solar basins, commissions like the CPUC will have to weigh rate impacts, reliability needs, and land-use trade-offs, all while ensuring that planning assumptions reflect load growth from data centers and other large customers. Their decisions will determine whether the federal push for proactive grid expansion translates into timely, ratepayer-supported projects on the ground.
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*This article was researched with the help of AI, with human editors creating the final content.
