By Kelsey Misbrener | April 21, 2022
FERC took steps today to improve regional transmission planning and cost allocation of certain types of transmission with a Notice of Proposed Rulemaking (NOPR). The proposed rule addresses the need for our nation’s energy infrastructure to be more resilient and reliable while also achieving cost savings for consumers.
“Transmission facilities provide a broad range of benefits,” said FERC Chairman Rich Glick. “Planning for those facilities with a longer-term forward-looking approach, in addition to fairly allocating their costs, is essential to ensuring we are developing energy infrastructure in a manner that reduces costs and enhances reliability.”
“Today’s proposal is the culmination of months of work by FERC’s dedicated staff and the Commissioners,” Glick added. “While there is a great deal more to do, I believe the Commission is rising to meet a timely and important challenge.”
The Natural Resources Defense Council applauded FERC’s plan.
“FERC’s proposal would provide a much-needed catalyst to deliver the upgrades our electricity grid desperately needs,” said John Moore, director of the Sustainable FERC Project at NRDC, in a statement. “Paired with investments from Congress, it would help get new wind and solar power connected to the grid throughout the heart of the nation, while increasing our safety by making the entire electricity system more resilient to climate-fueled hurricanes, floods and heat waves.”
SEIA also celebrated the move.
“This proceeding is a critical next step to encourage the significant transmission system upgrades that we need to bring more renewable energy projects online. In addition to numerous policy challenges facing developers, lack of access to high-voltage transmission lines continues to be a roadblock for delivering clean energy from where it’s generated to the homes and businesses where it’s consumed,” said Sean Gallagher, VP of state and regulatory affairs for SEIA, in a statement. “SEIA will advocate for several important items during this process, including giving more voice to independent power producers and expanding the factors considered during transmission planning to account for all the benefits that clean energy offers.”
Highlights of the proposed rule include:
Proposed changes to regional transmission planning
Transmission providers would be:
- Required to conduct regional transmission planning on a sufficiently long-term, forward-looking basis to meet transmission needs driven by changes in the resource mix and demand;
- Required to identify transmission needs through multiple long-term scenarios that incorporate a minimum set of factors, such as federal, state and local laws and regulations that affect the future resource mix and demand; trends in technology and fuel costs; resource retirements; generator interconnection requests and withdrawals; and extreme weather events;
- Able to consider a proposed list of broader set of benefits of regional transmission facilities to meet these long-term transmission needs for the purposes of selection and cost allocation; and
- Required to establish transparent and not unduly discriminatory or preferential criteria which seeks to maximize benefits to consumers over time without over-building transmission facilities to select transmission facilities in the regional plan for purposes of cost allocation that address these long-term transmission needs.
Proposed changes to regional transmission cost allocation
Each transmission provider would be required to:
- Seek the agreement of relevant state entities within the transmission planning region regarding the cost allocation for transmission facilities selected as part of long-term regional transmission planning.
- Establish a cost allocation method for transmission facilities selected as part of long-term regional transmission planning that is an ex ante cost allocation method, State Agreement Process by which one or more relevant state entities may voluntarily agree to a cost allocation method, or a combination thereof.
- Establish a cost allocation method for transmission facilities selected as part of long-term regional transmission planning that complies with the existing six Order No. 1000 regional cost allocation principles.
Proposed amendments to order No. 1000: Right of first refusal
The NOPR proposes to amend Order No. 1000 to permit the exercise of a federal rights of first refusal for transmission facilities selected in a regional transmission plan for purposes of cost allocation, conditioned on the incumbent transmission provider establishing joint ownership of those facilities.
Commenting on the NOPR
The Commission encourages commenters to identify improvements that will support development of more efficient and cost-effective transmission facilities. Comments are due 75 days from date of publication in the Federal Register. Reply comments are due 30 days after the initial comment deadline. Members of the public requiring assistance in filing comments should email FERC’s Office of Public Participation (email@example.com).