From Jim Mitchell of our DC office and John Cameron of our Portland office:
In a letter to FERC Chairman Jon Wellinghoff dated March 5, 2013, Senator Ron Wyden (D-OR), the new Chairman of the Senate Energy and Natural Resources Committee, strongly urged the FERC to support principles of regional flexibility when reviewing filings by utilities in the Northwest to comply with FERC Order No. 1000.
Order No. 1000, which was issued by the FERC in July 2011, required all transmission providers that are subject to regulation by the FERC to modify their open access transmission tariffs to implement certain broad principles by:
Adopting and participating in a regional transmission planning process that complies with certain standards and produces a regional transmission plan.
Describing procedures for the consideration of transmission needs driven by public policy requirements established by local, state, or federal laws or regulations in the local and regional transmission planning processes.
Improving coordination between neighboring transmission planning regions for new interregional transmission facilities.
Adopting a method for allocating transmission costs among neighboring regions.
See, Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities, Order No. 1000, FERC Stats. & Regs. ¶ 31,323 (2011), order on reh’g, Order No. 1000-A, 139 FERC ¶ 61,132, order on reh’g, Order No. 1000-B, 141 FERC ¶ 61,044 (2012).
Tariff modifications to comply with the requirements of Order No. 1000 were filed at the FERC in October 2012, and the FERC is beginning to review those filings. In Duke Energy Carolinas, LLC, 142 FERC ¶ 61,130 (2013), the FERC rejected an Order No. 1000 compliance filing made by Duke Energy Carolinas and Carolina Power and Light Company and Alcoa Power Generating, Inc. because they had failed to form a compliant transmission planning region that expanded the current regional transmission planning processes through collaboration with a greater group of non-affiliated transmission owners in the manner contemplated in Order No. 1000. In Maine Public Service Company, 142 FERC ¶ 61,129 (2013), the FERC waived the requirement for Maine Public Service Company to comply with the local and regional transmission planning and cost allocation requirements of Order No. 1000 because the Maine Public Service transmission system is relatively small and is not interconnected directly to facilities of any other transmission provider in the United States. The FERC is expected to act on other Order No. 1000 compliance filings during the next few months.
Transmission owners in the Northwest have coordinated their Order No. 1000 compliance filings through voluntary participation in inter-regional transmission groups that are comprised of both FERC-jurisdictional utilities, and public power entities such as the Bonneville Power Administration that are not generally subject to the FERC’s regulatory requirements. These groups include ColumbiaGrid, the members of which are Avista Corporation, Bonneville Power Administration, Chelan County PUD, Grant County PUD, Puget Sound Energy, Seattle City Light, Snohomish County PUD, and Tacoma Power, and the Northern Tier Transmission Group, which includes Deseret Generation & Transmission Co-operative, Inc., Idaho Power Company, NorthWestern Corporation, PacifiCorp, and Portland General Electric Company.
Each transmission owner participating in ColumbiaGrid and the Northern Tier Transmission Group made its own Order No. 1000 compliance filing based on a common set of transmission planning and cost allocation provisions. For example, utilities that participated in the ColumbiaGrid regional transmission planning process relied on the ColumbiaGrid Planning and Expansion Functional Agreement to achieve compliance with Order No. 1000.
Senator Wyden noted in his letter to Chairman Wellinghoff that transmission owners in the Northwest had proposed to develop approaches to transmission cost allocation through the Order No. 1000 process that were adapted to their particular circumstances. He expressed concern that imposition of the Order No. 1000 processes on non-jurisdictional utilities would be “akin to trying to hammer a square peg into a round hole.” He therefore endorsed a proposal by utilities participating in ColumbiaGrid under which cost allocations developed through the Order No. 1000 processes would not be mandatory for non-jurisdictional utilities. In his view, “it would be both unwise and unlawful for [the non-jurisdictional utilities in the Northwest] to cede their authority over transmission cost allocation to FERC.”
Senator Wyden also noted in his letter that “[t]he Northwest electric power industry, acting through ColumbiaGrid and the Northern Tier Transmission Group, has made a good faith effort to respond to Order No. 1000 in a constructive manner that preserves the ability of the region to continue to chart its own electric power destiny.” In a press release issued in conjunction with the decisions on the Order No. 1000 compliance filings by Duke Energy Carolinas, et al. and Maine Public Service, FERC Commissioner Philip D. Moeller stressed that Order No. 1000 was intended to provide transmission owners in different transmission planning regions with significant flexibility to tailor regional transmission planning and cost allocation processes based on unique regional characteristics. In an apparent effort to forestall “the potential adverse impact of Order No. 1000 on the Northwest region,” Senator Wyden encouraged the FERC, when evaluating Order No. 1000 compliance filings by utilities in the Northwest, “to show that it is truly committed to that principle.”