House Considers FERC Oversight

By Published On: March 26, 2010

Federal regulators defended regional pricing--instead of nationwide pricing--for sharing transmission costs during a House Energy & Commerce Committee hearing March 23. “There currently is not a standard approach” for paying for new transmission lines, said Federal Energy Regulatory Commission chair Jon Wellinghoff. He added that his “preference is to have states and regions work out cost allocation on their own.” The federal committee considered this week whether, and if, it should change Congressional oversight of federal regulators as a follow up from the 2005 Energy Policy Act. It was an informational hearing, giving FERC members an opportunity to address lawmakers. FERC members promised that the agency has no current plans to use its “backstop” authority to step in and site transmission lines if states don’t pave the way for new lines within a year of developers’ applications. “We have no plans to use it,” noted Wellinghoff. A transmission project set to carry primarily wind-produced energy to Southern California Edison territory was the first to get FERC approval for cost allocation on a grid-wide, rather than a single utility-wide, territory basis. Projects the California Independent System Operator deems necessary may be financed through FERC’s transmission access charge--thus spreading the costs over those who route electricity on the state’s primary grid. Rep. Ed Markey (D-MA) said that the agency would have to be a “strong referee” for stakeholders who participate in developing transmission and a “smart grid.” FERC members also made their case to lawmakers for more secrecy in their dealings with utilities to address potential cyber security threats. The current process through the North American Electric Reliability Corporation “is not expedited enough to deal with threats and vulnerabilities,” said Wellinghoff of internal and external threats to the grid. He asked for more secrecy to keep “fixes from getting out to the opposition.”

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