Docket No. RM21-17-000
Item E-1 | News Release
Good morning, Chairman Glick and Commissioners,
Item E-1 is a draft Notice of Proposed Rulemaking [NOPR], issued pursuant to section 206 of the Federal Power Act, to reform the Commission’s electric regional transmission planning and cost allocation requirements. The proposed reforms are intended to remedy deficiencies in the Commission’s existing regional transmission planning and cost allocation requirements to ensure that Commission-jurisdictional rates remain just and reasonable and not unduly discriminatory or preferential.
Today’s draft NOPR builds on Order Nos. 888, 890, and 1000, in which the Commission incrementally developed the requirements that govern regional transmission planning and cost allocation processes to ensure that Commission-jurisdictional rates remain just and reasonable and not unduly discriminatory or preferential.
With respect to regional transmission planning, the reforms proposed in this draft NOPR would require public utility transmission providers to conduct Long-Term Regional Transmission Planning on a sufficiently forward-looking basis to meet transmission needs driven by changes in the resource mix and demand. As part of this long-term regional transmission planning, public utility transmission providers would be required to: (1) identify transmission needs driven by changes in the resource mix and demand through the development of long-term scenarios, including accounting for high-impact, low-frequency events such as extreme weather; (2) evaluate the benefits of regional transmission facilities to meet these needs over a time horizon that covers, at a minimum 20 years starting from the estimated in-service date of the transmission facilities; and, (3) establish transparent and not unduly discriminatory criteria to select transmission facilities in the regional transmission plan for purposes of cost allocation that more efficiently or cost-effectively address these transmission needs. Additionally, the draft NOPR proposes to require that public utility transmission providers more fully consider dynamic line ratings and advanced power flow control devices in regional transmission planning.
With respect to transmission cost allocation, the reforms proposed in this draft NOPR would require that public utility transmission providers in each transmission planning region seek to obtain the agreement of relevant state entities within the transmission planning region regarding the cost allocation method or methods that will apply to transmission facilities selected in the regional transmission plan for purposes of cost allocation through long-term regional transmission planning and revise their OATTs to include those methods.
The draft NOPR also proposes to not permit public utility transmission providers to take advantage of the construction-work-in-progress (CWIP) incentive for transmission facilities selected in the regional plan for purposes of cost allocation through long-term regional transmission planning.
With respect to federal rights of first refusal, the draft NOPR proposes to amend Order No. 1000’s requirements, in part, to permit the exercise of federal rights of first refusal for transmission facilities selected in a regional transmission plan for purposes of cost allocation, conditioned on the incumbent transmission provider establishing joint ownership of the transmission facilities.
With respect to transparency and coordination, the draft NOPR proposes to require public utility transmission providers to adopt enhanced transparency requirements for local transmission planning processes and improve coordination between regional and local transmission planning with the aim of identifying potential opportunities to “right-size” replacement transmission facilities.
With respect to interregional transmission coordination and cost allocation, the reforms proposed in this draft NOPR would require that public utility transmission providers revise their existing interregional transmission coordination procedures to reflect the long-term regional transmission planning reforms proposed in this draft NOPR.
The proposed reforms in this draft NOPR related to regional transmission planning and cost allocation requirements, are focused on the transmission planning process, and not on any substantive outcomes that may result from this process. Taken together, the reforms proposed in this draft NOPR would work to remedy deficiencies in the Commission’s existing regional transmission planning and cost allocation requirements. This, in turn, would fulfill the Commission’s statutory obligation to ensure that Commission-jurisdictional rates remain just and reasonable and not unduly discriminatory or preferential.
The draft NOPR seeks comment on the proposed reforms and encourages commenters to identify enhancements to those reforms that could better support development of more efficient or cost-effective transmission facilities.
Thank you, this concludes our presentation. We are happy to address any questions.