A proposed privately-owned development to link western transmission to Texas and eastern hubs received Federal Energy Regulatory Commission approval to host an auction for up to half of the project’s initial capacity March 18. Tres Amigas transmission hub developer did not prevail with federal regulators in its effort to exempt all transmission owners that interconnect with the project from FERC jurisdiction--at least at this time. The project is able to “proceed” under federal regulatory rulings, according to FERC chair Jon Wellinghoff. “It may also open [transmission] for potentially vast renewables” development, he said. “It’s a great example of creativity,” said commissioner John Norris. Tres Amigas is backed by AltEnergy LLC. The Midwestern financing firm with offices in Iowa and Connecticut, boasts that one of its principals has background in energy--Bruce Rastetter, chief executive officer of Iowa ethanol producer Hawkeye. Federal regulators evaluate the quality of the application, but do not vet the wherewithal of the entity or entities behind proposals, according to FERC spokesperson Barbara Connors. While regulators denied the developer’s request for removal from FERC jurisdiction, they left the door open for a future exemption. Its blueprint is to connect western and eastern grids. But, the Texas grid--one that could proffer large amounts of wind power to the nation--was the sticking point for customer exemptions from FERC regulation. Federal regulators stated they could reconsider removing the Texas interconnection customers from its jurisdiction with a “valid application.” Commissioners decided that, in its plan to auction space on any newly developed physical transmission system hub, Tres Amigas would not jeopardize customers’ access to reasonable rates. “With a robust open-season process” for auctioning rights, FERC expects customers would benefit from the development, rather than suffer market manipulation, according to Tim Duggan, FERC counsel. It’s a non-traditional project. It plans to use superconductors and convert AC and DC flows back and forth when required. The project’s so-called “superstation” hub is slated for Clovis, New Mexico. With its open auction for rights to use the proposed development, Tres Amigas is also situated to become a trading exchange. In other federal regulatory news, if an entity under FERC regulation--like wholesale electricity traders that were involved in interstate commerce during the 2000-01 energy crisis--are found to violate the Federal Energy Policy Act or the Natural Gas Policy Act, they could be fined up to $1 million/day per violation. The March 18 policy statement “enhanced penalty authority and clarifies it,” said FERC’s Conners. Congress gave FERC new authority in 2005 under the Energy Act. Staff noted this policy aims at greater fairness and consistency.