FERC
NRECA: FERC Errs on Grid Costs
A key element of the Federal Energy Regulatory Commission’s landmark final rule on transmission planning and cost allocation is at odds with the agency’s statutory authority, NRECA CEO Glenn English told a House subcommittee.
Glenn English
FERC’s Order 1000 “erroneously asserts that the commission has the authority to impose costs—akin to a tax—on entities that do not receive transmission service from a public utility,” English said in testimony submitted to the Subcommittee on Energy and Power.
In fact, he explained, FERC’s jurisdiction provides no basis for inferring agency authority to invest public utilities with power to collect fees from non-customers, which could impact transmission-dependent electric co-ops.
“Congress gave the commission no authority to approve the generalized assessment of charges for regional transmission benefits” from entities that haven’t purchased or received jurisdictional service, noted English, who was elected to 10 terms in the House of Representatives.
Assigning the costs of increased transmission capacity to utilities that may indirectly benefit is no different from assigning them to steel producers and wind turbine manufacturers—or even hotels, restaurants and other businesses—that also may benefit, he pointed out.
If FERC gives itself this assignment authority, he said, “There is no logical end to that authority.”
English also addressed FERC’s contention that Order 1000’s cost allocation requirements are needed to address “free riders”—entities that shoulder less than their “fair share” of grid costs.
The NRECA executive dismissed this assertion. Even if FERC could demonstrate that free riders could be addressed only by assigning costs in the absence of a contract for jurisdictional service, he asserted, “The commission cannot take such action if it is not authorized to do so under the Federal Power Act.”
English’s written testimony focused on cost allocation. Noting that the final shape of the rule will depend on FERC’s disposition of utilities’ compliance filings during the next year, NRECA has raised only a limited number of issues on rehearing at the commission.