A divided FERC advances Order 1000 plan by Southern grid operator

Source: Hannah Northey, E&E reporter • Posted: Monday, July 22, 2013

The Federal Energy Regulatory Commission rejected part of a plan yesterday floated by a Southern grid operator and utilities to comply with the agency’s landmark Order 1000 rule over objections from Republican commissioners.

FERC voted 3-2 to approve a plan filed by Southwest Power Pool (SPP) to comply with the rule, which aims to revamp the planning and financing of power lines. SPP operates the grid in Arkansas, Kansas, Louisiana, Mississippi, Missouri, Nebraska, New Mexico, Oklahoma and Texas.

Three commission Democrats — Chairman Jon Wellinghoff, Cheryl Lafleur and John Norris — approved parts of SPP’s compliance plan but called on the grid operator to provide more detail about how it would determine which power lines will be needed to comply with public policy goals like renewable portfolio standards.

Republican Commissioners Tony Clark and Philip Moeller dissented.

Moeller warned that the decision could thwart prompt planning and construction of new lines. And Clark said the SPP plan was the right fit for the region. SPP wanted to use a system that incorporated regional legal requirements surrounding the construction of new power lines, as well as a competitive solicitation process.

FERC’s partial approval of the proposal, Clark said, could “lead to a plan that looks good on paper, but that fails to consider the realities needed to actually build projects and meet the needs of the region.”

The commission, he said, is too rigidly enforcing Order 1000 without appreciating the “potential real-world consequences” that could stymie the construction of transmission. “I cannot help but ask if the commission has missed the proverbial forest for the trees,” he said.

Clark also dissented in a 4-1 vote to partially approve a plan that a group of Southeastern utilities submitted to comply with Order 1000.

The companies — part of the Southeastern Regional Transmission Planning Process — are Southern Co., Georgia Transmission Co., Meag Power, Dalton Utilities, South Mississippi Electric Power Association and PowerSouth Energy Cooperative.

The four commissioners took issue with the utilities’ use of a single method to gauge the benefits of new transmission projects and said it failed to account for the fact that a project may fulfill an economic or public policy-related need.

Clark said he disagreed with an order that would force Southeastern transmission providers to divide the cost of new projects under Order 1000 even when it is unclear whether they can secure the necessary government approvals within the desired development schedule.

He also pointed to FERC’s rejection earlier this year of a proposal that would have made it voluntary for utilities in the Pacific Northwest to pay for regional transmission projects under Order 1000, a decision that drew the ire of Senate Energy and Natural Resources Chairman Ron Wyden (D-Ore.) (E&ENews PM, June 20).

“Not unlike the Pacific Northwest, [the process in the Southeast] is unique as it pertains to transmission planning — and the commission’s boilerplate response fails to accommodate the unique characteristics of this non-market, non-[regional transmission organization] region,” Clark said.

SPP and the utilities in the Southeast have 120 days to make changes to their proposal.