Governors' Wind Energy Coalition

The Federal Energy Regulatory Commission today conditionally approved plans that grid operators in New York and California submitted to comply with the agency’s sweeping new transmission planning policies. But the agency exempted two smaller companies that operate relatively few power lines from the rules.

FERC approved filings that the California Independent System Operator Corp. and New York Independent System Operator Inc. proposed to comply with Order 1000, a far-reaching rule that the commission implemented last year to revamp the way new power lines are planned and paid for. Some in the industry see the rule as a key step to integrating more renewables and bolstering long-distance planning, as well as opening the market to new entrants.

But FERC waived the requirements for a division of Alcoa Power Generating Inc. that owns “limited and discrete” power lines in New York that connect to the company’s smelting and fabricating facility near Massena, N.Y. FERC also waived the requirements for Lockhart Power Co., a small electric utility located in upstate South Carolina. But FERC said the companies are “not immune from being allocated costs if they benefit from regional transmission facilities selected in a regional transmission plan for purposes of cost allocation.”

The commission also conditionally approved filings from two public utility transmission providers — South Carolina Electric and Gas Co. and NorthWestern Corp. — but said the filings did not comply with the provision under Order 1000 that costs of new transmission projects align with benefits. FERC rejected a proposal from NorthWestern, a utility that serves South Dakota, Nebraska and Montana, that would have used a single methodology for determining what costs should be assessed for all projects, regardless of whether they would serve reliability, economic or public policy needs. FERC asked the utility to revise its proposal within 120 days.

FERC has been reviewing and approving filings for grid operators and utilities across the nation since it in 2011 approved Order 1000, which sets out principles for transmission planners on regional coordination, cost allocation, and the consideration of state and federal policies such as renewable portfolio standards.

Some utilities have accused the commission of overstepping its authority in issuing the rule and have asked a federal appeals court to step in (Greenwire, June 5, 2012).