FERC Transmission Planning Process Criticized

Lawmakers May 10 heard various ideas about how to increase the efficiency and reduce the cost of transmission projects across the U.S. in response to a changing energy industry. Strategies ranged from shrinking to expanding the federal transmission planning process.

Former Federal Energy Regulatory Commission Member Tony Clark said at a House Energy & Commerce Subcommittee on Energy hearing that FERC’s Order 1000 created an unwelcome bureaucratic layer without corresponding benefits. He said the order’s additional “red tape fails to take into account regional differences,” which is creating additional difficulties for high voltage project siting.

FERC adopted Order 1000 in 2007 hoping it would result in improved inter-regional transmission planning by increasing transparency. However, many say the order has fallen short of its goals.

“Putting the order on a diet would be the most helpful thing,” said Clark, senior advisor for the law firm of Wilkinson Barker Knaue. He advocated that Order 1000’s “most prescriptive aspects” be repealed.

Others took issue with FERC 1000’s cost allocation methodology and resulting higher costs.

The order introduced competitive bidding for transmission that “created new business interests and created different paradigms for projects with cost allocation versus those without,” driving up costs, said Jennifer Curran, Midcontinent Independent System Operator vice president of system planning. She noted how the changing nature of power generation in MISO, which is shifting from coal plants to utility-scale and distributed solar and wind projects, is driving a need for more transmission.

Others focused on how Order 1000 incentives have generated excessive investments.

“Now that technologies have matured to a point that much more market potential exists, it is a good time for the commission to rectify this gap and review its planning and incentives policies,” said Rob Gramlich, Grid Strategies president. He noted that does not mean more incentives, but better aligned ones.

Gramlich, who advocated for both expansion and improvement of the order, called for approving transmission projects with much higher capacity levels like those currently being built in Europe and China.

China has approved projects with capacities of 8,000 MW and 12,000 MW. “For comparison, the DC Pacific Intertie that ties the U.S. Pacific Northwest to Southern California operates at 560kV and can carry up to 3,800 MW,” Gramlich noted.

John Twitty, Transmission Access Policy Study Group executive director, said FERC should do more to encourage joint transmission ownership arrangements. That way, he said, “load -serving entities embedded in the transmission system have the opportunity to invest in their load-ratio share of the transmission grid,” giving them a seat at the “grown up” table. — Elizabeth McCarthy

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FERC Transmission Planning Process Criticized

William J. Kelly

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