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NARUC challenges FERC on transmission planning and cost allocation, calls for flexibility, deference

From the July 26, 2013 issue of Public Power Daily

Originally published July 26, 2013

By Robert Varela
Editorial Director

The National Association of Regulatory Utility Commissioners adopted a resolution July 24 that challenges the Federal Energy Regulatory Commission’s efforts to shape regional transmission planning and cost allocation through its Order No. 1000 and calls on the commission to be more flexible. The resolution approved by NARUC’s board "concludes that Order No. 1000, as implemented, inappropriately infringes on State authority reserved by Congress over integrated resource plans, generation and transmission decisions, assurance of resource adequacy and reliability, and authorization and construction of new facilities."

Section 201 of the Federal Power Act (FPA) limits FERC jurisdiction "only to those matters which are not subject to regulation by the States," the resolution said. "To the extent allowed by Section 201, FPA Section 217 requires FERC to merely facilitate planning and expansion of the transmission facilities to meet the reasonable needs of load-serving entities to serve their service obligations and does not otherwise expand FERC’s Section 201 jurisdiction."

In some regions without organized wholesale markets, FERC-jurisdictional and non-FERC-jurisdictional utilities such as public power entities and federal power marketing agencies "have cooperated extensively to pursue transmission planning and cost allocation approaches that are suitable to those regions, and states have engaged vigorously in those cooperative efforts," NARUC said. 

"The absence in Order No. 1000 of proper recognition of the decisive role States and cooperative regional planning processes play could actually delay successful transmission planning and cost allocation," NARUC added.

Because Order No. 1000 does not define the word "beneficiaries," FERC’s rulings on Order No. 1000 compliance filings "may result in transmission planning and cost allocations that conflict with State jurisdiction and policies," the state regulators said. Although Order No. 1000-A expressly disclaims any intent to undermine the states’ role, "FERC has taken, in certain regions, and may continue to take, action contrary to that statement," NARUC said.

States "should not be relegated to the status of a mere ‘stakeholder’ on these crucial issues nor should FERC action on Order No. 1000 compliance filings undermine or supersede State policies respecting transmission needs assessments, transmission siting, permitting and construction, integrated resource planning processes, reliability, and regional coordination of bulk electric systems," NARUC said.

The resolution calls for the commission, in future compliance orders, to "properly recognize the crucial role of the States and their role in shaping regional transmission planning and cost allocation policies." NARUC also said FERC "should implement Order No. 1000 in a more flexible manner, giving deference to cooperatively developed regional solutions for regional needs, as advocated by States." 


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Senior Vice President, Publishing 
Jeanne Wickline LaBella

Editorial Director
Robert Varela

Editor, Public Power Daily
Jeannine Anderson

Communications Assistant
Fallon W. Forbush

Manager, Integrated Media 
David L. Blaylock

Integrated Media Editor 
Laura D’Alessandro