Maine regulators are reviewing the transmission planning processes and decision-making criteria used by the state’s transmission and distribution (T&D) utilities and the related cost implications.
Specifically, the state Public Utilities Commission said in its recently issued notice of investigation that it will review transmission planning standards and reliability/needs assessment methodologies and assumptions used by the investor-owned T&D utilities to determine local transmission needs.
The PUC said it also seeks to assess the impact, or potential impact, of the newly proposed bulk electric system (BES) definitions upon local transmission systems and related planning.
In November 2010, FERC directed the North American Electric Reliability Corporation (NERC) to revise the definition of BES so that it encompasses all elements and facilities needed for the reliable operation and planning of the interconnected bulk power system.
NERC staff prepared for comment a definition of the BES, draft technical principles for exceptions to the general BES definition and draft rules of procedure to govern the exceptions process. These draft documents and their subsequent iterations prepared by NERC staff are expected to be acted upon by the NERC board of trustees in early 2012, the PUC added.
A new BES definition, if adopted by NERC and approved by FERC, will cause the need for additional upgrades to the local transmission network in Maine and thereby increase electricity costs to consumers, the PUC said.
Since transmission lines that are below 69-kV or substation facilities of any voltage do not require a certificate of need, there is a chance for substantial build-out of transmission that could increase costs to Maine ratepayers without the PUC’s determination of whether such transmission is in the public interest.
The PUC also said its investigation will examine differences and similarities among Maine T&D utilities’ planning standards, methodologies and assumptions, and the extent to which such standards are mandated by the relevant planning authority.
The investigation will examine regulatory options for oversight of transmission and related retail rates, including the extent to which facilities are classified as transmission or distribution, the PUC said.
“Among our objectives in opening this investigation is to determine the extent, if any, to which the commission should exercise its authority to mandate or constrain any particular transmission planning standards or how those standards are applied,” the PUC said.
Once the investigation is complete, the PUC said it expects that it and others, including Bangor Hydro Electric, Central Maine Power Company and Maine Public Service Company, will have enough guidance concerning the utilities’ use of planning standards to avoid the ad hoc examination of those standards that has characterized PUC proceedings involving transmission projects.
The PUC also said it expects the investigation, once concluded, to provide it with greater confidence that the transmission projects that are not directly subject to the PUC’s approval are the product of analysis that, at least in broad outline, has been confirmed as appropriate for ensuring reliability and sufficiently sensitive to cost.
Since the restructuring of Maine’s electric industry, various policy changes have contributed to increases in the amount of transmission investment made in the state and New England, the PUC said.
While some of these projects have qualified as pool transmission facilities, for which regional cost recovery are allowed, others have been determined to be local in nature and are paid by the ratepayers of the utility building the project. Transmission costs for regional projects and local projects – or portions of regional projects determined to be local in nature – in the state and region have increased in recent years, the PUC added.
Bangor Hydro and Maine Public Service are owned by Emera. Central Maine Power is a subsidiary of Iberdrola USA, which is a subsidiary of Iberdrola S.A.
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 16 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at firstname.lastname@example.org.