FERC’s June 20 ruling that includes what some see as an attempt to mandate cost-sharing among all transmission providers in the West has the utilities involved digging deep into the commission’s June 20 order to fully understand its implications, and has drawn the criticism of a high-ranking elected official deeply involved in energy matters.
In its partial acceptance of the FERC Order 1000 compliance filing submitted by ColumbiaGrid, FERC said the planning region defined in the filing did not meet Order 1000 requirements as it was submitted, but it could be deemed “of sufficient scope” if the filing parties enrolled in the ColumbiaGrid regional transmission planning process (Docket Nos. ER13-93-000, ER13-94-000, NJ13-1-000, ER13-836-000, ER13-98-000, ER13-99-000, ER13-836-000).
The filing parties – Avista (NYSE:AVA), Puget Sound Energy (PSE), MATL, the company developing the Montana-Alberta Tie Line, and the Bonneville Power Administration (BPA) – currently participate in the regional transmission planning process but have not formally enrolled, a move that would make them subject to the cost allocation requirements adopted in Order No. 1000.
That provision is causing concern at the FERC-jurisdictional utilities involved, as well as at the Bonneville Power Administration (BPA), which is not subject to FERC’s jurisdiction.
While acknowledging that it has yet to complete its evaluation of the order, PSE officials are working to understand the order’s implications.
“We are currently reviewing the order and will need time to fully understand how it addresses acceptance of mandatory cost allocation,” a PSE spokesperson told TransmissionHub June 21. “In the meantime, we will work with ColumbiaGrid members and other stakeholders as we consider our options.”
For its part, BPA said it is reviewing its options as it reviews the order.
“We are currently reviewing the order and will need time to fully understand how it addresses acceptance of mandatory cost allocation,” a BPA spokesperson told TransmissionHub.
While Order 1000 does not require any non-public utility transmission provider to enroll or otherwise participate in a regional transmission planning process, public utility transmission providers are required to do so.
However, some language in the order appeared to indicate an intention that enrollment would be a prerequisite to participation in a regional planning process.
“A non-public utility transmission provider will not be considered to have made the choice to join a transmission planning region and thus be eligible to be allocated costs under the regional cost allocation method until it has enrolled in the transmission planning region,” FERC said in the order, in which it also noted that the filing parties stated that it was imperative that “non-public utility transmission providers such as [BPA] participate in the ColumbiaGrid transmission planning process in order to have effective planning in the region.”
The prospect of a planning region in the Pacific Northwest that does not include BPA, which provides approximately 75% of the transmission service in the region, rankled FERC Commissioner Tony Clark, who dissented in the June 20 order. The possibility that BPA might be forced to enroll in the planning region, thereby exposing it to cost and expense sharing, was at the heart of the criticism of the June 20 order by Sen. Ron Wyden (D-Ore.), head of the Senate Energy and Natural Resources Committee.
Wyden said the order requires that BPA “sign a blank check” in order to be part of the planning process in the Pacific Northwest, while Clark said it was “hard to contemplate an effective regional planning effort that ignores the reality of a region dominated by” BPA.
Calling FERC’s ColumbiaGrid order “a major step backward,” Wyden strongly urged the commission to promptly reverse this decision, saying he would have little choice but to consider whether a legislative remedy is necessary if FERC does not do so.
In its order, FERC found that “the scope of the transmission planning region, the description of facilities that will be subject to the requirements of Order No. 1000, and the enrollment process specified in filing parties’ filings do not comply with the requirements of Order No. 1000.” Accordingly, Avista, PSE, and MATL were ordered to submit additional compliance filings, and the commission also noted that BPA “should also submit a further compliance filing to address these issues.”
Other facets less controversial
In its compliance filing, the parties defended their current regional planning process, saying the commission previously found the ColumbiaGrid process satisfied the requirements of Order 890. FERC, however, said that its previous orders primarily addressed the local transmission planning processes of Avista, PSE and BPA.
Regardless, FERC found that many facets of the regional transmission planning process partially complied with Order 890, which Order 1000 clarifies.
Order 890 requires that the process used to produce the regional transmission plan satisfy seven transmission planning principles, including coordination, openness, transparency, information exchange, comparability, dispute resolution, and economic planning.
With a minor clarification, FERC found that the regional planning process complies with the coordination principle, which requires public utility transmission providers to provide interested parties the opportunity to participate fully in the planning process.
One exception is a limitation on participation in a requested service project study team due to tariffs or applicable law, the commission noted. That limitation requires further explanation in order to be consistent with the coordination principle, and Avista, PSE and MATL were directed to address that issue in their further compliance filings.
FERC also found that the overall development of ColumbiaGrid’s transmission plan and the planning process complies with the principle of openness.
The commission found that ColumbiaGrid’s planning process also complies with the economic planning principle because the existing process gives all parties the opportunity to provide or receive input on any economic study requests.
FERC previously found that the filing parties’ tariff language complied with the dispute resolution principle, and that no changes were proposed to that language in the Order 1000 filing.
The filing partially complies with the principles of transparency and comparability, FERC said, and directed the companies to address the shortcomings in their further compliance filings.
FERC found that the parties’ filings did not comply with the information exchange principle.
The filings “do not detail the required information that the information exchange principle is intended to cover, such as customer load forecasts, projected service information, and existing and planned demand response resources provided by customers and stakeholders that are used to develop the regional transmission plan,” FERC said.
The largest area of deficiency overall appeared to be compliance with the portion of FERC Order 1000 that requires public utility transmission providers to evaluate alternative transmission solutions that might provide more efficient or cost-effective solutions than projects identified by individual utilities.
Based on the filings, FERC said it was “unclear whether ColumbiaGrid or the study team conducts an analysis to identify regional projects or proposals that might meet the needs of the transmission planning region more efficiently or cost-effectively than solutions proposed by study team participants.”
Avista, PSE and MATL were directed to make their filings consistent with the “more efficient or cost-effective” standard, including clarifying how unsponsored projects are considered as a way to meet the region’s needs more efficiently or cost-effectively. The filings must also state an “affirmative obligation” to identify transmission solutions that more efficiently or cost-effectively meet reliability requirements, address economic considerations, and meet transmission needs driven by public policy requirements.
The companies were also directed to identify the information that a merchant transmission developer must provide in order for ColumbiaGrid to assess potential reliability and operational impacts of a proposed transmission facility.
FERC also directed Avista and MATL to amend their filings with regard to projects driven by public policy. In the original filing, Avista did not include a definition of public policy requirements, while neither Avista nor MATL included a revised definition of need to include transmission needs driven by public policy requirements.
In cases where FERC directed the three jurisdictional utilities to make further compliance filings, it also said BPA “should also submit further revisions” addressing the same areas of concern.
Further compliance filings are due at FERC within 120 days of the June 20 order, which is Oct. 18.