The electric transmission grid is the backbone of the American economy and essential to the national security of our country. The mission of this agency is to ensure reliable, safe, secure, and economically efficient energy for consumers at a reasonable cost. Ensuring we have a robust, well-planned electric transmission grid is the single most important step that this Commission can take to fulfill that statutory mandate. It is a reliability imperative. The transmission grid ultimately allows consumers to have access to the electricity they need—when they need it—to power their homes and businesses. It is equally an affordability imperative. The transmission grid gives those same consumers access to diverse, low-cost sources of electricity that help ensure energy bills remain just and reasonable. All told, a strong electric transmission grid is the foundation for how this Commission meets its most important statutory responsibilities under the Federal Power Act (FPA).
That has never been more true than it is today. We are in the midst of a pivotal moment for the electricity system. As a nation, we are seeing unprecedented demands on the grid from extreme weather, increasing and rapidly changing patterns of electricity use, and fundamental shifts in the resource mix. And there is every reason to believe those trends will continue, and, indeed, accelerate, in the years ahead.
At the same time, our transmission grid is old. More than 70 percent of the grid was built over 25 years ago and much of it was put into service in the 1960s and 1970s, when this agency was still the Federal Power Commission. Our country cannot meet the challenges of today, let alone tomorrow, with yesterday’s transmission system. And being unprepared to meet those increased demands jeopardizes the safety and security of our grid. Nevertheless, as a country, we have so far failed to make the investments in the types of transmission facilities needed to ensure continued reliability and affordability at anywhere near the scale or speed needed to meet this pivotal moment.
The cost of continued inaction is immeasurable. Failure to act now would hamper the reliability and resilience of our electric grid while leaving customers holding the bag for the inevitably more costly upgrades in the future. Indeed, under the status quo, with its de facto emphasis on the piecemeal, just-in-time development of the grid to meet near-term reliability and economic needs, customers are being forced to fund investments that could have been more beneficial, less costly, or both had they been better planned from the start. That result undermines our economy and leaves customers less safe and secure, with enormous costs for both our grid and our country.
Avoiding those costs requires a forward-looking, comprehensive, and holistic transmission planning and cost allocation framework. That framework must consider the diverse challenges facing the transmission grid, identify the solutions that will address those challenges, and ensure only customers who benefit from those facilities pay their share of the cost, while ensuring that customers who do not benefit do not pay. Period.
We must conduct this planning and cost allocation on a regional basis and with an aperture consistent with the scope and scale of the challenges we face. That is, after all, why Congress enacted Title II of the FPA: To provide a coherent regional and national regulatory regime and avoid the harms and costs that come from a balkanized electricity system in which every state is its own regulatory island.[1]
Today’s final rule does just that. We are requiring transmission planners to plan Long-Term Regional Transmission Facilities using the factors we know drive the transmission needs of tomorrow and consider the reliability and affordability benefits those facilities will provide. At the same time, we are giving transmission planners discretion regarding whether and how to select which transmission facilities to build, recognizing no two regions of the country are alike and a one-size-fits-all solution simply will not produce the infrastructure we so badly need.
When it comes to the critical question of “who pays,” we are providing transmission planners with the maximum flexibility we can legally allow in order to facilitate negotiated, regionally appropriate solutions. And, as part of a multi-pronged approach to protecting customers, we are requiring transmission planners to reevaluate any previously selected Long-Term Regional Transmission Facility when the actual or projected costs of that facility significantly exceed the cost estimates used during selection. Finally, we are also providing states with unprecedented, expanded opportunities to work with transmission providers to shape the cost allocation approaches of their regions, while meeting the beneficiary pays requirement that is the foundation of cost causation under the FPA’s just and reasonable standard.
The Dissent’s Approach Would Not Result in the Energy Infrastructure Buildout We Need
Commissioner Christie provides a stark alternative vision in his dissent, one that would violate the cost causation principle and harm electric reliability. While we agree with his emphasis on the importance of cooperation with states—and have created unprecedented opportunities for such cooperation throughout this final rule—his radical new approach would permit a state to receive economic, resilience, and reliability benefits from new energy infrastructure, but not be charged a single cent unless they expressly agree to pay. That myopic view does not satisfy the requirements of the FPA and would not adequately facilitate the development of transmission we desperately need to ensure reliability and affordability. Contrary to the dissent’s assertion that this final rule is the product of a political agenda, failing to act based on the dissent’s flawed reading of the circumstances through the lens of politics would abdicate the Commission’s duty.
The dissent’s approach would necessarily require the Commission to ignore evidence about which consumers benefit from the increased reliability, resilience, and affordability due to grid expansion. Instead, backbone regional transmission could not be built unless every state unanimously opted into an agreed cost allocation. But for the same reason that passing around a hat is no way to fund the fire department, roads, or bridges, such an approach to building critical, public interest infrastructure that relies entirely on the voluntary contributions of individual states (or could even be defeated by the refusal to contribute by a single state) will not beget the transmission infrastructure needed to maintain reliability and affordability.
Put another way, there is little reason to believe that we, as a country, would build the infrastructure needed to power the world’s largest economy if individual states that benefit from that infrastructure could simply decline to pay. Instead, Commissioner Christie’s approach would be far more likely to result in a failure to make needed investments entirely, or else to down-size those investments in a way that results in exactly the type of piecemeal transmission development that led us to conclude existing transmission planning practices are rendering transmission rates unjust and unreasonable. That result would leave America far worse off. Just as the Articles of Confederation were not a sufficient platform to develop and sustain a national economy, so too would a wholly voluntary approach to paying for the needed infrastructure be inadequate to develop a transmission grid capable of powering the world’s largest economy. That alone is a reason to reject Commissioner Christie’s dissenting views.
In addition, the dissent’s approach would result in subpar transmission planning. Our nation needs transmission planning that looks ahead on the decades-long timeframe that is relevant to building backbone transmission facilities that will likely last a half-century or more. And transmission needs can best be predicted by considering many factors to discern their aggregate effect. Those include economics and technology fundamentals, changing demand patterns across customers of all types (including corporations), the full panoply of federal, Tribal, state, and local policy contributions, and even the changing weather patterns, which pose increasing challenges to maintaining a reliable and resilient electric grid. Rather than reflect that integrated reality, Commissioner Christie’s approach asks planners to isolate select state public policies and focus on how each individually shapes the grid. That too is a recipe for down-sizing needed infrastructure in a way that will result in less efficient or cost-effective investments that fail to meet this critical moment.
The Dissent Misrepresents the Final Rule
Commissioner Christie’s dissent responds to a strawman of his own making, not the final rule. And, even so, the dissent’s critique of the final rule ultimately boils down to one principal issue: the failure of the rule (in his view) to give every state an absolute right to veto the costs of a transmission facility, even one from which the state’s consumers would derive economic and reliability benefits. Although we respect his perspective, we disagree that the changes he seeks are legal—much less legally required—or that a final rule premised on his vision would beget the energy infrastructure needed to maintain reliability and affordability. In any case, his statement mischaracterizes critical aspects of the final rule, the most fundamental of which we address below.
First and foremost, Commissioner Christie asserts that Long-Term Regional Transmission Facilities are public policy projects whose purpose is to facilitate state efforts to shape the resource mix. He is wrong. This final rule requires transmission providers to comprehensively consider the factors that will shape the transmission needs of tomorrow. Although state efforts to shape the resource mix are one of many factors transmission planners are required to consider under this final rule, Commissioner Christie’s narrow focus on them misses the forest for a couple trees. The requirement to consider state public policies is part of the much broader requirement to comprehensively consider all significant factors shaping future transmission needs, where other factors, including the fundamental economic and reliability drivers, play a much bigger role. That Commissioner Christie is focused overwhelmingly on the state public policies with which he disagrees does not mean that the same is true of Long-Term Regional Transmission Facilities.
In any case, Commissioner Christie’s proposal is arbitrary and capricious in its lack of any limiting principle. Transmission needs of all sorts—economic or reliability, near-term or long-term—are shaped by all manner of state public policy choices. Fundamental state decisions, such as tax rates, zoning and land use laws, and almost every use of the police power more generally, inevitably shape the supply and demand of electricity. No transmission need is unaffected by those basic exercises of state power, which means that no transmission need can be fairly or accurately described as entirely divorced from the effects or consequences of state policy decisions.
While taking issue with some state policy choices, Commissioner Christie’s vision contains no method for determining which state policies must be considered and which might escape scrutiny even though they too contribute to underlying transmission needs. Similarly, it contains no rubric for determining how to evaluate the cumulative effects of state public policies—such as taxation and land use laws—that are, in many cases, far in excess of those derived from the public policies on which he chooses to focus. Nor does it contain any explanation for subjecting Long-Term Regional Transmission Facilities to this suite of planning and cost allocation requirements, but not economic and reliability projects—which are, for the reasons noted above, inevitably at least in part the product of public policies. That sort of unexplained, arbitrary line drawing is exactly what the APA prohibits.[2]
Let us be clear: These are reliability and affordability projects. As the final rule explains, the minimum standards we establish provide that Long-Term Regional Transmission Facilities are to be identified and evaluated based on their reliability and economic benefits. To call them anything else—no matter how many times—is a misnomer, plain and simple.
Similarly, Commissioner Christie’s claim that states will be forced to subsidize other states’ public policy choices could not be further from the truth. A bedrock requirement of this final rule is that customers will only be required to pay for a share of a Long-Term Regional Transmission Facility to the extent they benefit from that facility. That is cost causation 101. While we provide transmission planners, in cooperation with their state regulators, ample flexibility to determine how to satisfy that bedrock requirement, any cost allocation methodology that causes customers to pay for projects from which they do not benefit—or to pay a cost share out of proportion to the benefits they draw from the project—would be patently unjust and unreasonable. That is black letter law under the FPA,[3] which we have expressly incorporated into the requirements of this final rule.[4]
The dissent is equally wrong to suggest that anything less than a unilateral right to veto cost responsibility for a regional transmission project is unfair to states. To the contrary, both courts and the Commission have long recognized that the just and reasonable standard of the FPA requires that customers pay for infrastructure they use and benefit from.[5] The dissent’s approach, by contrast, would permit free ridership, allowing states to avoid paying by withholding their approval, while still receiving the substantial benefits of a more integrated, robust transmission system. Here too, both the Commission and the courts have expressly rejected that approach as inconsistent with cost causation.[6] Rather than ensure fairness, the dissent’s approach would create perverse incentives, rewarding states that decline to pay for infrastructure development that demonstrably provides reliability and economic benefits to those states, while penalizing those who roll up their sleeves to get those projects built. That is a recipe for inaction, not for building the energy infrastructure we so badly need to maintain reliability and affordability.
We agree with Commissioner Christie that transmission development works best when states are key partners in the process. That is why we take the unprecedented steps described in the final rule to give them a central role. But partnership and collaboration are not the same thing as giving every state the right to veto cost responsibility for transmission projects thus allowing their residents to reap a windfall by benefitting from transmission facilities for which they did not pay their legally required share.
Commissioner Christie also asserts that the final rule deprives states of their long-standing authority. That is categorically false. Let us again be clear: States retain all the same authorities over retail rates and transmission siting they held prior to the final rule. Rather than deprive states of authority, the final rule empowers them with unprecedented opportunities to engage with transmission providers in developing a cost allocation framework.
Commissioner Christie’s objection is to the structure of the FPA, and long-established, court-upheld Commission regulation of regional transmission planning under Order No. 1000, not the final rule. He objects to the transmission provider’s role in deciding, without state approval, whether to invest in a transmission project and determine, subject to Commission oversight, which consumers must pay for it. But that basic structure is not new to the final rule—it is how transmission planning occurs today, consistent with the FPA and Commission precedent, including Order No. 1000. At Congress’s direction, public utilities, not states, have the right to propose to the Commission rates and practices affecting those rates and we cannot deprive them of those rights.[7] Neither states’ siting authority nor their exclusive jurisdiction over retail rates give them the unilateral right to dictate matters subject to the Commission’s exclusive jurisdiction, such as the transmission rates and practices affecting those rates that are the subject of this final rule.[8] For example, a state could reject siting or other approvals for the portion of a regional transmission project located within its jurisdiction, provided that its determination was consistent with relevant state and federal law. But states cannot stymie needed regional transmission projects by simply declining to pay for them. Nor is that concept new to this final rule. Under established economic and reliability planning, state policies are contributing factors to needed transmission, and states have never held a veto authority over costs for such facilities under Order No. 1000.[9] Nothing in this final rule changes those basic facts.
What has changed is that states now, as a result of this final rule, have an unprecedented opportunity to shape transmission planning and cost allocation, elevating our system of cooperative federalism with the states to a degree not previously seen in the history of this Commission. Most significantly, we are requiring transmission providers to host a dedicated forum for meaningful state participation in proposing cost allocation methods and processes. And the rule also permits a State Agreement Process for allocating the costs of all, or a subset of, Long-Term Transmission Facilities. Beyond cost allocation, states will have an opportunity to provide input on how to account for specific factors in Long-Term Scenarios, and states can provide information on how their own policies and planning affect Long-Term Transmission Needs. The rule also requires transmission providers to consult with and seek the support of states regarding how Long-Term Regional Transmission Facilities are evaluated and selected. We expect that where states come together to articulate workable, legal frameworks for planning and paying for needed infrastructure, their transmission providers will listen.
Indeed, under the State Agreement Process provided in the final rule, states very well could agree to, and transmission planners could adopt, a version of Commissioner Christie’s preferred cost allocation approach.[10] So long as those expected to use the Long-Term Regional Transmission Facilities pay a share of the cost that is roughly commensurate with the benefits they will receive, nothing in this final rule prohibits states in a transmission planning region from adopting Commissioner Christie’s preferred approach for funding the transmission facilities they need to ensure reliability and affordability.
Commissioner Christie also asserts that this final rule breaks with Order No. 1000 by mandating outcomes rather than regulating transmission planning processes. Here, too, he is wrong. The rule is clear that no transmission provider is required to select any particular project.[11] Instead, just as in Order No. 1000, the obligation on the transmission provider is to plan for the world as we expect it to be and then make its own business decisions after having conducted that planning process. The final rule’s minimum planning standards do not un-do that core discretion. Requiring planning to be based upon documented drivers of transmission needs and to incorporate objective measures of how potential investments pay off improves the planning process, it does not mandate any particular outcome.[12] In short, in recasting the rule to fit his narrative, Commissioner Christie conveniently ignores one of its core elements: that it imposes no obligation to develop any regional transmission project.
Finally, Commissioner Christie is also incorrect in arguing that this final rule violates the Major Questions Doctrine. He asserts two bases for that argument, neither of which hold water.
First, he contends that our intention in issuing this final rule is to elicit trillions in spending on transmission. As an initial matter, the goal of this final rule is to facilitate the development of transmission infrastructure needed to maintain reliability and affordability. That is the case no matter how many times or in how many ways Commissioner Christie purports to ascribe our ‘true’ intentions. In any case, his trillion-dollar estimates are nothing more than a sleight of hand that is unsupported by the record before us. To support his claim that this final rule will cause “literally trillions” in transmission investment, he cites to one academic study and one news article stating that in order to achieve a “net-zero” emissions level by 2050, trillions will need to be spent on transmission.[13] Putting aside whether that figure is accurate and whether “net zero” is an appropriate policy goal for the country—a question which we agree is not for this Commission to resolve—it is an astounding logical leap to say that because certain individuals believe a certain amount of investment is necessary to achieve a certain policy goal, that this rule will necessary cause customers to spend that amount of money. In any case, as the dissent points out, significant investments in transmission are already being made by public utilities around the country regardless of anything we do—or do not do—here today. This final rule regulates the process by which those investments are identified, evaluated and, where appropriate, selected in order to help ensure that they reflect the most efficient and cost-effective options available. That is what the Commission has been doing for decades; the fact that transmission has become a more politically salient topic does not transform our longstanding practice into a major question.
Second, he contends that our statement that the Commission has exclusive jurisdiction over the transmission planning practices that directly affect wholesale rates means that this Commission has crossed the major questions Rubicon. But it was the courts, not this Commission, that took that step. As he observes in his dissent, South Carolina concluded that the transmission planning practices regulated by Order No. 1000—which are the same practices addressed by this final rule—were practices that directly affected wholesale rates and thus fall squarely within the Commission’s jurisdiction.[14] And as the courts have explained, where a practice meets that directly affecting standard, it falls within the Commission’s exclusive jurisdiction.[15] This long-settled law in no way alters or dilutes the significant and critical role for states to play under their jurisdiction and, as noted above, we have significantly expanded that role in this final rule. Rather it means that the specific practices in the tariffs on file with this Commission, as required by this final rule, are within the Commission’s exclusive jurisdiction, not that of the states. The final rule’s recitation of black letter law hardly runs afoul of the major questions doctrine.
We Encourage Transmission Providers to Facilitate Joint Ownership Structures
Finally, we would be remiss not to mention one policy priority that is not finalized in this rule: The creation of a federal right of first refusal for certain transmission facilities developed through a joint ownership structure. As the final rule explains, we find that proposal is better considered as part of our generic proceeding on Transmission Planning and Cost Management, where it can be evaluated alongside other proposals for ensuring that transmission facilities are developed as efficiently and cost-effectively as possible.[16]
Nevertheless, we underscore that our decision today should not be construed as a lack of support for the concept of joint ownership or the potential for a federal ROFR to effectively encourage its use. Indeed, joint ownership structures that partner transmission owners with other load-serving entities in their footprint, such as public power or non-profit cooperatives, can provide many benefits and should be encouraged.
In these arrangements, the load-serving entity partner’s participation can reduce costs for customers in the footprint. Such joint ownership structures bring together diverse parties, allowing the participating entities to better allocate risks and responsibilities, capture efficiencies, and promote innovation, all to customers’ ultimate benefit.[17] Moreover, by bringing a wider range of entities into the transmission development fold, joint ownership can leverage additional sources of capital, including those that do not typically invest in transmission facilities, which can itself have significant benefits for customers.[18]
For example, TAPS highlights specific instances of joint ownership arrangements with tax-exempt public power entities providing significant savings to customers.[19] TAPS and APPA estimate these kinds of joint ownership arrangements can typically yield a “more than a 5% annual cost reduction in ratepayer-funded return and associated tax costs,” which could produce billions of dollars in savings when applied to reasonable transmission investment forecasts.[20] Relatedly, NRECA highlights examples of joint ownership arrangements with electric cooperatives yielding reliability and efficiency benefits, including, among others, leveraging electric cooperative’s ability to provide increased operations and maintenance support and access to lower cost financing through the Rural Utilities Service.[21]
In light of those substantial benefits, we clarify that nothing in this final rule should be interpreted to prohibit or impair joint ownership arrangements. To the contrary, we encourage transmission providers, in compliance with this rule and elsewhere, to find ways to encourage these arrangements. For example, in compliance with this rule, transmission planners could use joint ownership as a factor to be considered in evaluating and selecting the more efficient or cost-effective solution to meet a long-term transmission need. Similarly, we note that the developers of a jointly owned transmission facility can consider seeking transmission incentives under section 205 of the FPA that reflect the risks and challenges associated with developing such facilities.[22] In addition, the Commission will continue to evaluate other potential actions to incentivize joint ownership, including considering in the Commission’s cost management proceeding whether to provide a right of first refusal or other mechanisms to encourage its use.
* * *
Our electric transmission grid is at a crossroads. Our nation is facing down an extended period of unprecedented change in demand, supply, and the myriad other factors that fundamentally shape our energy needs. And we do so with a network of transmission infrastructure that was overwhelmingly built in the last century and in the face of a very different reality.
We have a choice: We can take consequential action to build the infrastructure needed to ensure reliability and affordability. Or we can pursue half-measures, which may help on the margins, but will ultimately leave us lacking the infrastructure we need to keep the lights on at a price that customers can afford. With this final rule, we emphatically choose the former path.
But we are not going down this road alone. As discussed above, we have opened the door for our state partners to play a leading role in shaping the next generation of energy infrastructure. We urge them to walk through it and deploy their unique perspectives as regulators and siting authorities of electric infrastructure to develop regionally tailored solutions. Together, we can forge a process that will serve customers for generations to come. This is the moment to step up, to develop both processes and physical infrastructure to withstand the changes and challenges ahead. This is the moment to build an electric transmission grid for the 21st century.
For these reasons, we respectfully concur.
Willie L. Phillips
Chairman
Allison Clements
Commissioner
[1] New York v. FERC, 535 U.S. 1, 6 (2002) (“When it enacted the FPA in 1935, Congress authorized federal regulation of electricity in areas beyond the reach of state power,” tasking the Commission’s predecessor with “effective federal regulation of the expanding business of transmitting and selling electric power in interstate commerce.” (quoting Gulf States Utils. Co. v. F.P.C., 411 U.S. 747, 758 (1973))); FERC v. Elec. Power Supply Ass’n, 577 U.S. 260, 265-66 (2016) (EPSA) (same); cf. First Iowa Hydro-Elec. Co-op v. F.P.C., 328 U.S. 152, 180 (1946) (The Federal Water Power Act of 1920 was “a complete scheme of national regulation which would promote the comprehensive development of the water resources of the Nation, in so far as it was within the reach of the federal power to do so, instead of the piecemeal, restrictive, negative approach of the River and Harbor Acts and other federal laws previously enacted.”).
[2] See, e.g., Prometheus Radio Project v. F.C.C., 373 F.3d 372, 390 (3rd. Cir. 2004) (explaining that when an agency has engaged in line-drawing, “its decisions may not be ‘patently unreasonable’ or run counter to the evidence before the agency” (citations omitted)); Sinclair Broadcast Grp., Inc. v. F.C.C., 284 F.3d 148, 162 (D.C. Cir. 2002) (explaining that lines drawn cannot be “patently unreasonable, having no relationship to the underlying regulatory problem” (citing Cassell v. F.C.C., 154 F.3d 478, 485 (D.C. Cir. 1998)); Am. Trucking Assocs., Inc. v. I.C.C., 697 F.2d 1146, 1151 (D.C. Cir. 1983) (“The arbitrariness which the [Administrative Procedure Act] proscribes is the failure to draw reasoned distinctions where reasoned distinctions are required.”).
[3] See City of Lincoln v. FERC, 89 F.4th 926, 930 (D.C. Cir. 2024) (“The FPA’s just and reasonable standard incorporates a cost-causation principle.”); Old Dominion Elec. Coop. v. FERC, 898 F.3d 1254, 1255 (D.C. Cir. 2018) (“Under the [FPA], electric utilities must charge just and reasonable rates. For decades, the Commission and the courts have understood this requirement to incorporate a cost-causation principle—the rates charged for electricity should reflect the costs of providing it.” (citations omitted)); see also BNP Paribas Energy Trading GP v. FERC, 743 F.3d 264, 268 (D.C. Cir. 2014) (“[T]he cost causation principle itself manifests a kind of equity. This is most obvious when we frame the principle (as we and the Commission often do) as a matter of making sure that burden is matched with benefit.”).
[4] Bldg. for the Future Through Elec. Reg’l Transmission Planning & Cost Allocation & Generator Interconnection, Order No. 1920, 187 FERC ¶ 61,068, at P 1305 & n.2786 (2024).
[5] Beneficiary pays is founded on a recognition, grounded in the unbreakable laws of physics, that “the nature of power flows over an interconnected transmission system does not permit a public utility transmission provider to withhold service from those who benefit from those services but have not agreed to pay for them.” Order No. 1000, 136 FERC ¶ 61,051 at P 534; see also id P 535 (“the cost causation principle provides that costs should be allocated to those who cause them to be incurred and those that otherwise benefit from them”); Ill. Commerce Comm’n v. FERC, 576 F.3d 470, 476-77 (7th Cir. 2009) (ICC v. FERC I) (“All approved rates must reflect to some degree the costs actually caused by the customer who must pay them . . . To the extent that a utility benefits from the costs of new facilities, it may be said to have caused a part of those costs to be incurred, as without the expectation of its contributions the facilities might not have been built, or might have been delayed.” (internal citations omitted)); K N Energy, Inc. v. FERC, 968 F.2d 1295, 1300 (D.C. Cir. 1992) (“FERC and the courts have added flesh to these bare statutory bones, establishing what has become known in Commission parlance as the ‘cost-causation’ principle. Simply put, it has been traditionally required that all approved rates reflect to some degree the costs actually caused by the customer who must pay them.”); see, e.g., Sw. Power Pool, 182 FERC ¶ 61,141, at PP 12, 99-103 (2023).
[6] Order No. 890, 118 FERC ¶ 61,119 at P 561 (“there are free rider problems associated with new transmission investment, such that customers who do not agree to support a particular project may nonetheless receive substantial benefits from it”); Order No. 1000, 136 FERC ¶ 61,051 at P 535 (“[if] the Commission could not address free rider problems associated with new transmission investment, [] it could not ensure that rates, terms and conditions of jurisdictional service are just and reasonable and not unduly discriminatory”); El Paso Elec. Co. v. FERC, 76 F.4th 352, 363 (5th Cir. 2023) (“No amount of emphasizing other competing interests permits FERC to sacrifice the foundational principle of cost-causation by refusing to allocate costs to those who cause the costs to be incurred and who reap the resulting benefits.” (citations omitted)).
[7] 16 U.S.C. § 824d; Atl. City Elec. Co. v. FERC, 295 F.3d 1, 9 (D.C. Cir. 2002) (“Section 205 of the Federal Power Act gives a utility the right to file rates and terms for services rendered with its assets.”).
[8] See Order No. 1920, 187 FERC ¶ 61,068 at PP 253-83 (affirming Commission’s legal authority to require participation in Long-Term Regional Transmission Planning).
[9] Indeed, Commissioner Christie recently approved, over the objection of other states, PJM’s plan to regionally allocate the costs of transmission to address reliability concerns driven, at least in part, by Virginia’s policy to incent siting of data centers in that state. See PJM Interconnection, L.L.C., 187 FERC ¶ 61,012 (2024).
[10] We find Commissioner Christie’s contention that the final rule would end PJM’s use of its existing State Agreement Approach, and MISO and SPP’s respective regional state committees, puzzling. Order No. 1920, 187 FERC ¶ 61,068 (2024) (Christie, Comm’r, dissenting, at P 11). The final rule enhances states’ role and relaxes certain Order No. 1000 requirements for state-approved cost allocations. It is inexplicable that these additional flexibilities would result in transmission providers rolling back opportunities for state engagement in existing Order No. 1000 processes, where that is the opposite of the thrust of the final rule. Moreover, PJM’s State Agreement Approach was approved outside of compliance with Order No. 1000 and has never served as PJM’s exclusive ex ante cost allocation method, as Commissioner Christie suggests.
[11] Order No. 1920, 187 FERC ¶ 61,068 at P 1026 (“The Commission did not propose in the NOPR, and we will not require in this final rule, that transmission providers select any particular Long-Term Regional Transmission Facility—even where a particular transmission facility meets the transmission providers’ selection criteria in their OATTs.”).
[12] Id. (“In other words, as in Order No. 1000, our focus is on ensuring that regional transmission planning processes result in just and reasonable rates, and not on requiring that these processes achieve any particular substantive outcome.”).
[13] Id. (Christie, Comm’r, dissenting at P 3 & n.7.
[14] In South Carolina, it was undisputed that transmission planning generally was a practice that directly affected wholesale rates, but the court further held that the absence of regional transmission planning was itself such a practice. S.C. Pub. Serv. Auth. v. FERC, 762 F.3d 41, 56-59 (D.C. Cir. 2014).
[15] See, e.g., Nat’l Ass’n of Regul. Util. Comm’rs v. FERC, 964 F.3d 1177, 1181 (D.C. Cir. 2020) (“Congress g[ave] the Federal Energy Regulatory Commission . . . exclusive authority over the regulation of the sale of electric energy at wholesale in interstate commerce, including both wholesale electricity rates and any rule or practice affecting such rates.” (cleaned up)).
[16] Order No. 1920, 187 FERC ¶ 61,068 at PP 1563-64 & n.3346.
[17] See, e.g., TAPS Initial Comments at 33-34 (“As explained in the TAPS 2021 White Paper, inclusive joint transmission ownership arrangements—whether structured as an inclusive transco, a shared system, or joint ownership of new transmission facilities—result in collaborative and inclusive planning, development, and siting of transmission, and have proven highly effective in getting transmission built to meet the needs of all LSEs.” (citing TAPS, Inclusive Joint Transmission Ownership Arrangements: An Effective Means to Site and Build Transmission Need to Support Our Changing Resource Mix (June 2021), https://www.tapsgroup.org/wp-content/uploads/2021/09/TAPS-Inclusive-Joint-Ownership-White-Paper.pdf)); see also Rob Gramlich et al., Grid Strategies, Fostering Collaboration Would Help Build Needed Transmission, at 11-30 (Feb. 2024) (attached to WIRES Supplemental Comments) (highlighting specific examples of large regional transmission projects that resulted from diverse partnerships, including with public power entities and cooperatives, and which met many transmission needs and produced a wide range of benefits).
[18] See, e.g., APPA Initial Comments, attach. at 4-10 (Declaration of James Pardikes) (listing advantages in equity ratio, debt cost, and income tax expense, and opportunities for risk diversification as potential benefits of joint ownership arrangements with public power utilities); NRECA Reply Comments at 15-16; Citizens Energy Reply Comments at 2-4 (describing how its unique joint ownership business model enables Citizens to provide direct support to low-income ratepayers and disadvantaged communities, addresses multiple concerns that arise in transmission development, and advances multiple Commission policy goals).
[19] TAPS Initial Comments at 45 (examining savings across Vermont Transco, ATCLLC, Fargo Project, and SE Missouri Project).
[20] TAPS Initial Comments at 45-46 & nn.133-135; APPA Reply Comments at 4.
[21] GDS Assocs., National Rural Electric Cooperative Association, at 25-27 (Aug. 17, 2021) (attached to NRECA Initial Comments).
[22] See Promoting Transmission Investment Through Pricing Reform, 141 FERC ¶ 61,129, at P 24 (2012) (“The Commission encourages incentives applicants to participate in joint ownership arrangements and agrees with commenters to the NOI that such arrangements can be beneficial by diversifying financial risk across multiple owners and minimizing siting risks.”); Promoting Transmission Investment Through Pricing Reform, Order No. 679, 116 FERC 61,057, at P 354 (2006) (“[T]o the extent our jurisdiction allows, the Commission will entertain appropriate requests for incentive ratemaking for investment in new transmission projects when public power participates with jurisdictional entities as part of a proposal for incentives for a particular joint project. Encouraging public power participation in such projects is consistent with the goals of section 219 by encouraging a deep pool of participants.”).