In a vote split along partisan lines, the Federal Energy Regulatory Commission today approved plans in the Midwest and mid-Atlantic for revamping the grid planning process, while the two Republicans on the commission rejected the order and expressed concern about the fate of new projects.
FERC Chairman Jon Wellinghoff, a Democrat, and Democratic Commissioners Cheryl Lafleur and John Norris found that PJM Interconnection and the Midwest Independent Transmission System Operator had largely complied with Order 1000, the agency’s landmark ruling that revamps the way new power lines are planned and paid for.
But they also asked PJM and MISO to “clarify and refine their proposals” and to explain how they choose transmission projects to meet public policy goals and how some regional projects affect neighboring areas. The commissioners also found utilities in PJM and MISO in a number of circumstances must ensure that the process for building new lines is competitive.
Republican Commissioners Tony Clark and Philip Moeller, however, voted against the order, but it was unclear what provisions they took issue with. Much of their concern, they said, stemmed from provisions that would set back the construction of much-needed power lines.
“We had a difference of opinions as to going one way or another, resulting in more transmission built or a process that drags it out,” Moeller told reporters after the commission’s meeting, adding that “there are many” areas in which he didn’t agree with his colleagues.
Clark said he was concerned that some provisions of the order might “actually impede rather than accelerate actual transmission projects.”
The issue has vexed the commission for months, and today’s meeting started three hours late in part because FERC staffers had been up all night working on the issue.
But all five commissioners came together to approve filings by 10 FERC-jurisdictional members of WestConnect representing a group of utilities spread across California, Arizona, New Mexico, Nevada, Colorado and Wyoming.
FERC found that these utilities, including the Arizona Public Service Co. and NV Energy Inc., partially complied with Order 1000 and that members of WestConnect that weren’t subject to commission oversight had to take part in regional planning to enjoy the benefits of projects to come out of that regional process.
The commissioners also said WestConnect must implement a mandatory – not voluntary – process for entities to determine how to divvy up the cost of new power lines. Wellinghoff said entities in WestConnect must “sign up to join up” and get the benefit of new power lines approved under a regional planning and cost allocation process, or they won’t benefit.
“I’m hopeful they will see the benefits of joining, … Certainly, we can’t have any voluntary cost allocation process,” he said, adding that he hasn’t analyzed whether certain entities would face legal challenges in joining. “It’s their job to determine whether or not they can do it, and it’s their job to determine whether or not there are benefits for them to join.”
The commissioners now face months of overseeing compliance filings as they enact Order 1000, and expressed concern today that the largest challenge is ensuring the markets are competitive. Norris said FERC gave states the ability to block competition if they see fit but added that such a trend is concerning.
“I know we granted deference in states, and if they don’t want competition, that’s their prerogative. But I’m cautious about … extending that restriction of competition,” Norris said. “That’s going to be a struggle going forward.”
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