FERC reaches agreement on contentious cost-allocation rule in the West

Source: Hannah Northey, E&E reporter • Posted: Friday, September 19, 2014

The Federal Energy Regulatory Commission today clarified that Bonneville Power Administration — a Department of Energy agency that operates the Pacific Northwest grid — won’t be required to enroll in transmission planning under FERC’s far-reaching Order 1000 rule.The commission unanimously approved Order 1000 compliance filings for WestConnect and ColumbiaGrid — a nonprofit corporation to which BPA belongs — that makes clear nonpublic utility transmission providers are not required to enroll in transmission planning under the rule. If BPA does join, it will be subject to the regional cost allocation method, FERC said.

FERC’s vote could ease a potential roadblock to Order 1000, a high-profile rule that aims to ramp up planning and divvy up the costs of new power lines to modernize the grid.

The commission was split last summer on whether to require participation throughout the Southwest and Pacific Northwest — even among entities like BPA that FERC does not oversee.

FERC Chairwoman Cheryl LaFleur, former Commissioner John Norris and Commissioner Philip Moeller approved ColumbiaGrid’s filing then but stipulated that the transmission provider must make it mandatory for its members — Avista Corp., BPA and Puget Sound Energy — to participate in cost allocation filings to comply with Order 1000.

FERC Commissioner Tony Clark dissented in that vote.

Sen. Ron Wyden (D-Ore.), then chairman of the Senate Energy and Natural Resources Committee, blasted FERC’s decision last year, saying federally owned entities like BPA shouldn’t be forced to “sign a blank check to pay for the costs of transmission that they have not contracted for and may not use” (E&ENews PM, June 20, 2013).

BPA owns 75 percent of the high-voltage transmission in the Northwest and markets power from 31 federal dams and one nuclear power plant, serving public and nonpublic utilities in Oregon, Idaho, Washington and western Montana.

Today, all commissioners — including Clark — said the orders succeeded in striking a balance between the needs of the region and the requirements of Order 1000.

FERC also made clear that other investor-owned entities that fall under FERC’s oversight will still be required to comply with Order 1000, including regional plans for divvying up the cost of new power lines that move forward.

“I think that … there is now significant flexibility that exists for these public power entities that otherwise would have made forming a meaningful region in the West very difficult,” Clark said. “The order we have right now strikes the right balance.”

Doug Johnson, a spokesman for BPA, said the agency was still reviewing the decision.

“We appreciate the commission’s intent, as stated in its press release, to ‘foster continued, proactive cooperation between public and non-public utility transmission providers, increase transparency, and allow regional transmission planning to be conducted inclusive of non-public utility transmission providers,” he said.