On January 17, 2013, the Federal Energy Regulatory Commission (FERC) issued its Final Policy Statement regarding the allocation of capacity on new merchant and non-incumbent, cost-based, participant-funded transmission projects. The Final Policy Statement clarifies and refines FERC’s existing policy, which has evolved significantly during the past 10 years, in order to provide “more flexibility in the capacity allocation process for customers and transmission customers,” including allowing merchant transmission developers the ability to allocate up to 100 percent of their project’s capacity through bilateral negotiations. The Commission finds that each merchant transmission project has unique project-specific characteristics that warrant providing developers flexibility in risk-sharing with its customers; however, consistent with its statutory duty to ensure that capacity allocation not be unduly discriminatory or preferential, the Commission imposes more stringent reporting and compliance requirements on developers.