ColumbiaGrid proposes PEFA revisions to comply with FERC Order 1000

As part of its efforts to enhance its planning process to comply with FERC Order 1000, ColumbiaGrid on July 5 released the final review draft of proposed amendments to its planning and expansion functional agreement (PEFA).

“The PEFA parties have made and continue to make strong progress towards enhancing [the organization’s] current planning process for purposes of Order 1000 compliance,” ColumbiaGrid said in a letter accompanying the document.

The revised 77-page document includes approximately three pages dedicated to defining “Order 1000,” as well as related terms including beneficiaries and benefits, planning regions, cost allocation and cost allocation methodology.

For Order 1000 purposes, the draft document defines ColumbiaGrid’s planning region as the transmission systems operated or proposed to be operated in the regional interconnected systems. Projects in a neighboring planning region, as that term is used in Order 1000, are to be considered for interregional projects for the purposes of complying with the order, according to the document.

“For purposes of Order 1000 cost allocation, a project can qualify as an Order 1000 project only if and to the extent it is part of the Order 1000 ColumbiaGrid planning region,” the document continued.

The way those costs will be allocated is detailed in two pages of formulas and instructions directing how costs and benefits of Order 1000 projects will be determined.

For example, costs of Order 1000 projects will be estimated by ColumbiaGrid, “based on information provided by the Order 1000 sponsor, the study team, and ColumbiaGrid. ColumbiaGrid may seek the input of others, including third-party experts,” according to the proposed revisions.

ColumbiaGrid is to also identify such projects’ beneficiaries, the document said.

Determination of benefits is to be done using analytical tools including power flow and stability studies to project the extent to which any transmission owner or operator would avoid costs, power flow and stability studies to project transfer capability changes, as well as production cost studies to project the estimated usage of any such changes in transfer capability, according to the document.

Allocation of project costs among project beneficiaries that are not project sponsors will be determined by a specified formula. For example, beneficiaries are to be allocated the lesser of the beneficiary’s Order 1000 benefits, or the total project cost multiplied by the beneficiary’s fractional share of the project’s benefits.

The proposed revisions also include methodologies for determining the avoided costs of deferred and eliminated transmission facilities.

“The avoided costs of deferred transmission facilities will be the borrowing costs projected to be avoided … (rather than the capital costs themselves of such facilities) plus the incremental operations and maintenance costs of such facilities projected to be avoided during the planning horizon,” according to the document.

Similarly, the avoided costs of eliminated transmission facilities “will be the portion of the levelized projected capital costs of such facilities that fall within the planning horizon plus the projected incremental operation and maintenance costs of such facilities during the planning horizon.”

The proposed changes also include modifications to add language included in Order 1000, including references to “public policy [and] efficiency” as well as “non-discriminatory,” with regard to access to the transmission system.

Additionally, the document includes language clarifying the definition of a “proposed capacity increase project,” adding a definition of “existing obligation project (EOP) need,” “merchant transmission developer,” “non-incumbent transmission developer,” and “need,” and adds the names of parties who recently joined as signatories to the PEFA.

The effort to revise the PEFA involved the PEFA parties, federal and state regulatory staff, as well as stakeholders who participated in four public meetings, written comments, and individual conversations, according to ColumbiaGrid.

Comments are due by July 13. Because PEFA is a contract, ColumbiaGrid is seeking input “on the Order 1000 concepts contained in [the] draft, not suggestions or edits on specific contract language.”