FERC
Grid Planning, Costs in FERC Focus
The Federal Energy Regulatory Commission has approved a final rule that its chairman says will “provide consumers with greater access to efficient, low-cost electricity.”
A new rule aims at reforming grid planning and allocating costs of new projects to their beneficiaries. (Photo By: trotsche)
FERC indicated that its Order 1000, aimed at reforming transmission planning processes and allocating the costs of new projects to their beneficiaries, would remove barriers to transmission development.
Speaking before the commission’s July 21 vote, Chairman Jon Wellinghoff said the new rule was driven in part by the projection that wind and solar would constitute about 60 percent of the resources expected to be added by 2019.
“The existing transmission system was not built to accommodate this shifting generation fleet,” the chairman said. In strengthening and expanding it, he added, grid planners must seek the most efficient and cost-effective ways to meet the needs of their regions.
FERC is not requiring a one-size-fits-all approach to fulfilling the rule’s requirements, Wellinghoff emphasized. Rather, it expects each region to fashion processes and procedures to meet its own needs.
The final rule was developed from a June 2010 proposal in a process that drew some 200 comments. Its requirements include transmission providers’ participation in a regional transmission planning process that considers needs driven by state or federal laws or regulations.
The rule also sets requirements for regional allocation of transmission costs. This has sparked controversy, and Wellinghoff addressed the matter before FERC’s vote. Under the rule, he specified, “costs must be allocated at least roughly commensurate with estimated benefits.”
“Those that receive no benefits should not be allocated costs, and no costs should be allocated outside a region unless the other region agrees,” he added.
The final rule would also require public utility transmission providers to remove any federal right of first refusal with respect to these facilities from FERC-approved tariffs and agreements, subject to several limitations.
“The new rule asserts that it does not increase reciprocity or FERC Lite jurisdiction over non-jurisdictional utilities like co-ops,” noted Rich Meyer, NRECA senior regulatory counsel. FERC Lite refers to the regulators’ exercise of direct, albeit limited, jurisdiction over the rates, terms and conditions under which such utilities provide transmission service.
“If so,” Meyer added, “we are pleased by the commission’s prudent forbearance in this important regard.”