FERC Reaffirms Controversial Regional Transmission Planning Requirement for Transmission Providers
From Brian Gish of our DC Office:
On May 17, 2012, the Federal Energy Regulatory Commission issued Order No. 1000-A that denies rehearing of its Order No. 1000, thus leaving in place the requirement that all FERC-jurisdictional electric transmission providers must participate in regional and inter-regional processes to plan for new transmission facilities. Such transmission providers must develop, in conjunction with stakeholders, a regional transmission planning process that will be used to select new lines needed by the region. Existing Independent System Operators and Regional Transmission Organizations may already satisfy the regional planning requirements, but still must make a compliance filing that shows how they comply.
Order No. 1000 requires that “Public Policy Requirements,” such as environmental or renewable energy laws and regulations, be considered when selecting new transmission in the regional plan, in addition to traditional reliability and economic considerations. Once selected for the regional plan, the costs of the line must be allocated to customers pursuant to a cost allocation plan developed by the region in accordance with principles set forth by FERC, including the principle that costs be allocated “roughly commensurate” with the benefits bestowed. The rehearing order affirmed that existing transmission providers have no priority rights over “non-incumbent” developers to build transmission facilities selected for the regional plan, as long as all proposed builders meet qualification criteria. Transmission providers must also develop inter-regional transmission coordination procedures and cost allocation methods to address issues with neighboring regions.
FERC strongly encourages, but does not mandate, that non-jurisdictional transmission providers participate in the regional planning and cost allocation methods. Non-jurisdictional providers would only become subject to the planning and cost allocation requirements if they choose to enroll in the regional process. However, if a non-jurisdictional provider wants to ensure that it receives the benefits of open access transmission service by public utilities, it would have to participate in the Order No. 1000 planning processes.
Transmission providers must file compliance plans at FERC by October 11, 2012 to demonstrate how they have modified their transmission tariffs and pursued regional coordination actions required by Order No. 1000. Another compliance filing is required by April 2013 for transmission providers to address inter-regional coordination efforts. If a transmission provider cannot reach consensus with stakeholders as to planning or cost allocation processes, it must demonstrate that it made a good faith effort to do so.
Order No. 1000 leaves many implementation details open, to be addressed in rulings on individual compliance plans. A hoard of petitioners for rehearing argued that FERC exceeded its statutory authority in the mandates in the order. State commissioners argued that FERC’s requirement for regional transmission plans usurps traditional state authority over the siting of transmission lines. Some transmission providers argued that existing planning processes are working fine and there is no need for FERC intervention. Court appeals are likely, but will not be resolved in time to halt the required submission of compliance plans.