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A Big Deal

What’s in FERC Order 1000?

Nov 3, 2011 - Bill Opalka - renewablesbiz.com

A federal transmission planning order is so massive, industry pros are taking several cracks at it to discuss what it means. Such was the case recently.

ICF International held one such event with its recent webinar, “What will FERC Order 1000 Mean for You?”

The Federal Energy Regulatory Commission didn’t reinvent transmission planning, but it has taken existing structures and raised the bar or added new layers of complexity on the next round of infrastructure expansion.

“FERC Order 1000 is a big deal,” said ICF Vice President Elliot Roseman. If explaining the rest of it was only that simple.

“This is more of a process of doing more transmission planning and resource planning on a wider and wider geographic level. FERC is really trying to facilitate that,” he said.
In many ways, FERC is demanding more transparency in the process and has expanded the stakeholder roster to involve more into the planning process Roseman said.

Perhaps the part that generates the most discussion is the additional leg on the stool for planning purposes. Reliability and economic considerations have been joined by “public policy” considerations in transmission planning.

“FERC is not explicit what they mean by public policy requirements the regions define what they mean,” Roseman said. “It clearly takes things like renewable portfolio standards into account, along with EPA regulations in regard to emissions.”

But there is discretion for state and local conditions that aren't under federal jurisdiction.

“How far the public policy requirements extend is something each region is on to have to decide upon, he said.

In effect, the order addresses more than transmission. This order clearly is having impact on generation as well, influencing decisions on where the renewable are located.

Definitions are going to be complicated to some degree. The cost allocation formula says that new projects must be included, but those projects already in regional plan could presumably be grandfathered.

“There’s some jockeying going on already trying to figure out exactly what it means for a project to be new,” Roseman added.

The expanded universe of regional planning also has implications for cost allocation in a single region or for projects that cross boundaries. Consensus among the stakeholders has to be reached. If the formula must be agreed upon outside the boundary of one region, “100 percent consensus” on the formula must exist.

“FERC has little bit of teeth. If a region cannot agree, then it will decide for the region, although that’s not the preferred course,” Roseman said.

One standard that remains is that federal, state and local levels still have jurisdiction but the question remains it he those boundaries will be redrawn.

Costs should be allocates roughly commensurate with the benefits, the beneficiary should pay for the benefits they receive. That has proven to be especially controversial, even before the final order was issued.

The so-called right of first refusal has been revamped, which world benefits those merchant transmission companies that want to expand into region. “This will not be to the exclusion of independent merchant project; proposed projects with not be assumed to include the incumbent utilities in that region,” he added.