A federal order undermining utility monopolies on transmission in favor of open access to lower consumer costs and spur investment was upheld by an appellate court Aug. 15. The U. S. Court of Appeals for the District of Columbia ruled that the Federal Energy Regulatory Commission\u2019s \u201cOrder 1000\u201d\u2014which launched competition into high voltage line operations in October 2011\u2014was within the agency\u2019s statutory authority. The agency applauded the decision by the three-judge panel. Order 1000 \u201cis critical to the commission\u2019s efforts to support efficient, competitive, and cost-effective transmission,\u201d stated Cheryl La Fleur, commission chair. \u201cOur nation needs substantial investment in transmission infrastructure to adapt to changes in its resource mix and environmental policies,\u201d she added. \u201cThe industry can now move forward with its transmission planning efforts with greater certainty,\u201d said California Independent System Operator spokesperson Steven Greenlee. None of the state grid operator\u2019s projects are impacted by the ruling, he added. Multiple challenges to the federal agency\u2019s order included claims that its elimination of utilities\u2019 first rights of refusal to make way for competition infringed on state control over planning, siting, and constructing transmission, and thus was beyond federal regulators\u2019 reach. Under rights of first refusal, the incumbent utility got first dibs on transmission projects, including those proposed by a third party. The court disagreed with claims that doing away with the rights of first refusal was not a legitimate exercise of FERC\u2019s power. The commission\u2019s \u201cmandate fits comfortably within Section 201(b)\u2019s grant of jurisdiction over the transmission of electric energy in interstate commerce,\u2019\u201d it reasoned. It also noted that the first refusal right led to cost-ineffective projects concern of the federal agency it called \u201cacute\u201d because of an expected \u201cmassive amount of transmission facility development\u201d over \u201cthe next two decades as renewable energy sources were integrated into the grid.\u201d The court noted that the agency\u2019s authority under the Federal Power Act over transmission is much broader than in the area of energy sales. In late May, a majority of a three-judge panel of the D.C. Circuit court ruled that federal regulators lacked the authority to allow negawatt bidding into the wholesale market because it crossed the blurry link between federal and state jurisdictions over markets. The commission appealed the panel\u2019s challenge to its demand-response policy last month, asserting its importance to the nation\u2019s competitive wholesale electricity markets and reliable electric service (Current, July 1, 2014). That panel\u2019s ruling will not go into effect while the petition to the full court is pending. In the legal challenge to the commission\u2019s open access order, petitioners also challenged the federal commission\u2019s transmission cost allocation ground rules, asserting the agency also lacked authority over this issue. Another claim was that the cost allocation methodology was \u201carbitrary and capricious.\u201d The appeals court rejected both arguments, backing the agency\u2019s allocation rules for independent system and regional system operators. \u201cThe final rule uses a light touch: it does not dictate how costs are to be allocated. Rather, the rule provides for general cost allocation principles and leaves the details to transmission providers to determine in the planning processes,\u201d according to the court. Petitioners\u2019 argument that the order\u2019s cost allocation violated the Mobile Sierra doctrine was held to be premature. That doctrine assumes that freely negotiated contracts are just and reasonable, unless proven to be harmful.