Bullish on FERC Order 1000
Commisioner offers view
The United States has underinvested in its transmission infrastructure, particularly the high-voltage infrastructure, given the changes in power supply and in energy use, FERC Commissioner Cheryl LaFleur recently said.
“Transmission is needed for reliability, to help make markets work effectively and reduce costs to customers, and to connect new power sources,” she said.
There are many issues that affect why more transmission has not been built, she said, noting that it is costly, high capital intensive and difficult to build as well as to site.
Also, there is the difficulty of figuring out where transmission will be built and who will pay for it, she said, adding that FERC Order 1000, issued last summer, attempts to help people make some progress in that area.
The order reforms FERC’s electric transmission planning and cost allocation requirements for public utility transmission providers.
LaFleur also noted there is “a significant issue brewing here in New England,” referencing a transmission operating agreement that certain New England companies have signed. “[T]hey have raised the legal issue about some protection for their right of first refusal,” she said. “Because that was a New England-specific issue, we deferred it to the compliance phase of the Order 1000 process and we expect we’ll be dealing with that more specifically then.”
Of New England, she said the region already has a transmission planning process in place. “I think it’s a fair statement that Order 1000 will require less of a region like New England that already has a very robust regional planning process than regions that are just starting to plan as a region more or less for the first time,” she said.
LaFleur anticipates “a great deal of differences in what the different regions file” in regard to the order, noting that it is appropriate, “first of all, because of the state of maturity of transmission planning around the country is in different places, but also because regions have different needs and different drivers of their energy choices.”
New England has done a good job deciding as a region and cost allocating as a region a large number of reliability projects over the last decade and getting a lot of them built, she said.
About FERC Order 1000’s component involving public policy projects, she said, “It’s an opportunity, I think, for New England to look at [its] process, what’s working, what’s not working and how the process can be tweaked, not only to take in the public policy projects expressly, but to perhaps improve what you’re already doing.”
Among other things, she said the order aims at helping regions work successfully with their neighbors. “We did not require a national singing of Kumbaya because I just think that’s not at the stage we’re at, but I do hope you’ll look at local, regional and cross-regional opportunities because diversity of supply is good for customers, whether it’s fuel diversity or transmission diversity.”
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