Report of the Electricity Regulation Committee

Article excerpt

This report provides a summary of the significant decisions, orders, or rules issued by the Federal Energy Regulatory Commission (the FERC or Commission) in 2011 in the electricity regulation area. The first part of the report addresses significant rulemaking orders issued in 2011, while the remainder of the report addresses Commission orders in individual cases.*

I. INTRODUCTION

The Electricity Regulation & Compliance Committee, which prepared this report, has a broad focus and overlapping jurisdiction with several other EBA committees. As these other committees have a more targeted focus, we have generally deferred to those other committees for a summary of the Commission's activities in their respective areas. Thus, this report does not generally address transmission reliability and planning (System Reliability, Planning & Compliance Committee), wholesale market-based rates (Power Generation & Marketing Committee), enforcement issues (Compliance & Enforcement Committee) and demand-side management/renewable energy (Renewable Energy & Demand-Side Management Committees). In addition, this report does not generally address court appeals (Judicial Review Committee).

II. RULEMAKINGS AND POLICY STATEMENTS

A. Order No. 1000, Transmission Planning and Cost Allocation By Transmission Owning and Operating Public Utilities

On July 21, 2011, the FERC issued Order No. 1000, a Final Rule on Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities.1 Order No. 1000 requires public transmission utility providers to engage in a regional planning process to develop a regional transmission plan, which specifies a regional cost allocation method for new transmission facilities selected in the regional transmission plan.2 Additionally, Order No. 1000 imposes reforms with respect to nonincumbent developers, interregional transmission coordination, and cost allocation.3 Order No. 1000 seeks "to achieve two primary objectives: (1) ensure that [regional and interregional] transmission planning processes" identify and evaluate potential transmission alternatives and develop "a regional transmission plan that can meet transmission needs more efficiently and cost-effectively; and (2) ensure that the costs of [regional and interregional] transmission solutions [selected] to meet regional transmission needs are allocated fairly to those who . . . benefit[]."4

Order No. 1000 prescribes three requirements for transmission planning.5 First, every public utility is required "to participate in a regional transmission planning process that [develops] a regional transmission plan and complies with existing Order No. 890 transmission . . . principles."6 With respect to the regional transmission planning process, public utilities, in consultation with stakeholders, are directed to assess "transmission solutions that [may] meet the needs of the transmission planning region more efficiently or cost-effectively."7 The second requirement for transmission planning is that local and regional transmission planning processes must consider transmission needs based on Public Policy Requirements established by state or federal laws or regulations.8 The third obligation for public transmission planning directs public utilities in each pair of neighboring transmission planning regions to undertake interregional coordination activities to determine if there are more efficient or cost-effective solutions to their mutual transmission needs.9 The FERC declined to require that a formal interregional transmission planning agreement be developed and filed with each pair of neighboring transmission planning regions.10 Instead, "each pair of neighboring transmission planning regions . . . must develop the same language to be included in each public utility transmission provider's [Open Access Transmission, Energy and Operating Reserve Markets Tariff (OATT)]," which "describes the interregional transmission coordination procedures for that particular pair of regions. …