FERC Rulemaking to Reform Regional Transmission Planning and Cost Allocation

Morgan Lewis - Power & Pipes

Morgan Lewis - Power & Pipes

FERC issued an advance notice of proposed rulemaking (ANOPR) in Docket No. RM21-17, seeking comment on the potential need for reform of Commission regulations necessary to improve regional transmission planning and cost allocation and generator interconnection processes. Comments and reply comments are due 75 days and 105 days, respectively, after publication in the Federal Register.

The Commission noted increasing location of renewable generation resources further from load has impacted the interconnection process and transmission planning. The Commission seeks comment on whether its regional transmission planning, cost allocation, and generator interconnection processes must change to meet the demands both for today and in the future. In discussing the ANOPR during the Commission’s recent open meeting, Chairman Richard Glick stated that it is not enough for the Commission to simply take a “piecemeal approach to expanding the transmission system” but instead that the Commission must anticipate and work towards addressing what “tomorrow’s new generation resources will require.”

The ANOPR raised the following questions:

  • How to plan for future scenarios, including planning for the needs of anticipated future generation, as part of the regional transmission planning and cost allocation processes
  • Whether the Commission should require transmission providers in each transmission planning region to establish a process to identify geographic zones that have the potential for the development of large amounts of renewable generation and plan transmission to facilitate the integration of renewable resources in those zones
  • Whether reforms are needed to improve the coordination between the regional transmission planning and cost allocation and generator interconnection processes
  • How to appropriately identify and allocate the costs of new transmission facilities in a manner that satisfies the Commission’s cost causation principle that costs are allocated to beneficiaries in a manner that is at least roughly commensurate with estimated benefits
  • Whether participant funding of interconnection-related network upgrades may be proven to be unjust and unreasonable and whether the Commission should eliminate the independent entity variations that allow RTOs/ISOs to use participant funding for interconnection-related network upgrades.

The ANOPR also requested comments on whether the Commission’s current approach to oversight of transmission investment adequately protects customers. If it does not, the Commission asks which potential reforms may be required and are legally permissible to ensure just and reasonable rates. The Commission further requested comments on the Commission’s legal authority to act in these areas, interregional planning, and the coordination between transmission providers’ individual planning processes and regional transmission planning processes.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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