House Energy and Commerce Subcommittee on Energy and Power members are expected to grill FERC Chairman Jon Wellinghoff on the planning and cost allocation provisions of FERC Order 1000 at a hearing Thursday, Oct. 13.
Wellinghoff will be on a panel with Energy Dept. Senior Advisor Lauren Azar and both are also expected to field questions about the transmission siting collaboration that Wellinghoff and Energy Secretary Steven Chu unveiled Oct. 11.
Apparently in response to pressure from state regulators and other opponents, Secretary Chu said Tuesday that DOE would not pursue its plan to delegate to FERC its authority to designate National Interest Electric Transmission Corridors, which are geographic areas where transmission congestion or constraints adversely affect consumers. Instead, DOE will work more closely with FERC in reviewing transmission projects under sections 216 of the Federal Power Act.
In a Sept. 13 interview with TransmissionHub, Wellinghoff explained that if FERC were to assume DOE’s designation authority it would focus on proposed projects that could potentially be part of the regional planning processes under Order 1000. “That’s the linkage between that and Order 1000,” he said. “That’s a bit of a departure from the way DOE did corridor designation, which is on a more widespread basis across larger areas that are not associated with specific projects.”
On Order 1000, Wellinghoff may be asked about the level of flexibility on cost allocations that the order provides to regions. Wellinghoff addressed that concern in the same interview with TransmissionHub, noting that FERC has provided the regions general guidelines that benefits must be roughly commensurate with costs.
“Basically we’re saying there has to be some relationship between your benefits and your costs, when you’re allocating costs,” he noted. Beyond that, FERC is allowing the regions to structure cost allocation methodologies in ways that best meet the regional needs, he added.
“I think that’s a reasonable thing to do,” Wellinghoff said. “And if they want more direction, then don’t do anything and FERC will give you some direction. We’ve explained to them that if they don’t come up with an allocation methodology that FERC will have to develop one for them.”
The issues that will be addressed at the hearing, which are outlined by committee staff in an internal memo to subcommittee members, are:
- The need for new electricity transmission infrastructure and the barriers and challenges to siting and constructing new transmission facilities.
- The statutory authority of DOE and FERC with respect to the siting, planning, and pricing of electricity transmission infrastructure.
- The roles and responsibilities of the following entities with respect to the siting, planning, and pricing of electricity transmission infrastructure:
- State Public Utility Commissions
- Regional Transmission Organizations
- Electric utilities
- The difference between traditional planning and cost allocation principles and those set forth in FERC Order No. 1000.
- The scope, purpose, and implementation of Section 216 of the Federal Power Act, including its effect on jobs and the American economy.
The hearing will be the second time in recent weeks that Wellinghoff will have appeared before the subcommittee.
At a Sept. 14 hearing, Wellinghoff and other FERC commissioners stood by their refusal to conduct a formal analysis of how new Environmental Protection Agency rules will affect reliability of the power grid. The House subcommittee continued to press FERC on Oct. 6 with a series of questions sent to commissioners. The next day, on Oct. 7, FERC announced it will hold a technical conference in November to consider the reliability impacts of EPA regulation.
Others on the witness list for the Oct. 13 hearing include: Greg White, Commissioner, Michigan Public Service Commission; John DiStasio, General Manager and CEO, Sacramento Municipal Utility District; Nicholas Brown, President and CEO, Southwest Power Pool; Philip Jones, Commissioner, Washington Utilities and Transportation Commission; Steven Transeth, Principal, Transeth & Associates; and Joseph Welch Chairman, President and CEO, ITC Holdings.
DiStasio will represent the Large Public Power Council and Transeth will represent the Coalition for Fair Transmission Policy.