On July 21, 2011, the Federal Energy Regulatory Commission (“FERC”) unanimously adopted Order No. 1000, its Final Rule on transmission planning and cost planning. Order No. 1000 seeks to reform the transmission planning process to (1) require a regional transmission planning process; (2) include procedures for the consideration of public policy requirements (e.g., renewable portfolio standards and other state clean energy requirements); (3) modify the right of first refusal for certain new transmission facilities; and (4) provide for additional coordination for planning and cost allocation both within and among regions.

FERC Order No. 1000 is a major development but also very complex. The most critical details will arise out of the compliance process, tariff changes, and challenges to those changes. This client alert summarizes important preliminary impressions and questions concerning the potential impact of Order No. 1000, particularly with respect to enhanced support for renewable project development and other state clean energy policies, and opportunities for non-incumbent transmission developers to construct transmission facilities.