FERC order demonstrates commitment to comparable transmission – industry sources

FERC’s unprecedented decision to exercise authority over the Bonneville Power Administration demonstrates a commitment to comparable transmission service and reinforces its support of renewable energy, industry sources said Dec. 15.

The commission on Dec. 7 ordered the BPA to file an open access transmission tariff (OATT) that does not discriminate against non-federal generators, namely wind, thus exercising for the first time its authority under section 211A of the 2005 Federal Power Act.

“This is an important decision because it is the first time FERC has had to explore the rule for dispatching different kinds of generation on a nondiscriminatory basis, and it’s an important issue for the further development of renewable generation resources,” an industry lawyer told TransmissionHub

FERC at the time said the need to exercise this authority is rare, but its decision to do so makes clear it is willing to use it when necessary to enforce comparable, nondiscriminatory transmission service, said Lara Skidmore, managing partner for Troutman Sanders.

Though FERC does not prescribe what BPA’s tariff should contain, it suggests a pro forma tariff with deviations, where appropriate, said Skidmore.

“It’s a bit of an uphill battle to come up [with] a solution vastly different from pro forma because that is really the standard for comparability,” Skidmore said during a webinar that the law firm held Dec. 15.

BPA, which had been providing service under a reciprocity standard, had been curtailing wind generation on its transmission system in favor of hydropower. The federal power marketing agency owns the majority of transmission in the Pacific Northwest but does not fall under FERC jurisdiction.

One point of significance in FERC’s Dec. 7 decision involves how the 211A standard and reciprocity standard differ with respect to deviations from a pro forma OATT, Skidmore said.

In the reciprocity safe harbor context, the commission considers whether tariff variations “substantially” conform with or are superior to the pro forma tariff; under the 211A order, the commission will only consider whether variations are comparable and not unduly discriminatory or preferential, Skidmore pointed out.

“We think their intent is to subject variations under a 211A order to a higher standard, similar to or the same as a standard applied to a public utility transmission provider,” Skidmore said.

The language in section 211A notably broadens the definition of a transmission provider to a “transmitting utility,” and is not limited by who owns that entity, a second industry lawyer pointed out.

“The nature of the decision is if you are a transmitting utility, you have to provide the same sort of access as that under a standard OATT, like the private entities do,” this lawyer said.

Skidmore noted that it is still to be seen how FERC will handle deviations if they are included in BPA’s tariff. However, historical precedent seems to suggest FERC does not grant deviations lightly, she said.

“If you look at the commission’s willingness to grant deviations traditionally, they don’t do it very often and are very careful when they do, because they don’t want to disrupt the broader structure of the tariff, and they don’t want to create seams issues with adjacent balancing authorities,” Skidmore said. 

About Rosy Lum 525 Articles
Rosy Lum, Analyst for TransmissionHub, has been covering the U.S. energy industry since 2007. She began her career in energy journalism at SNL Financial, for which she established a New York news desk. She covered topics ranging from energy finance and renewable policies and incentives, to master limited partnerships and ETFs. Thereafter, she honed her energy and utility focus at the Financial Times' dealReporter, where she covered and broke oil and gas and utility mergers and acquisitions.