NARUC to FERC: Consider states when implementing Order 1000

A resolution passed by the NARUC board of directors calls on FERC to recognize the roles of the states in regional transmission planning and cost allocation and to give deference to regional solutions for regional needs when implementing FERC Order 1000.

The order was one of a slate of 15 resolutions adopted by the board July 24, at the end of the NARUC 2013 Summer Committee Meetings in Denver.

The language of the final resolution on the implementation of Order 1000 was markedly softer than language in the draft resolution circulated some 10 days before the start of the meeting.

The draft resolution declared that Order 1000 “exceeds FERC’s jurisdiction,” verbiage that was not included in the version passed by the NARUC board. The final version retained language declaring that Order 1000 “inappropriately infringes” on authority granted to the states by Congress in several areas including integrated resource plans, generation and transmission decisions, and determinations over cost recovery, including cost allocation, among other things.

The draft resolution also called on FERC to revise the cost allocation principles of Order 1000. The final resolution passed without that demand, and without language contained in the draft that said Order 1000’s cost-allocation principles “demonstrate a pronounced inconsistency with traditional ratemaking principles that assign costs only to the cost-causers.”

Like the draft resolution, the final version also urged FERC to “properly recognize the crucial role of the states,” but instead of calling for a revision of Order 1000’s cost allocation principles, the final resolution urged FERC to recognize the role of the states “in shaping regional transmission planning and cost allocation policies.”

The Coalition for Fair Transmission Policy (CFTP) praised the resolution, calling it an indication that the debate over the future of the nation’s electricity grid generally, and Order 1000 specifically, is continuing.

“Our sense is that FERC has overstepped its legal authority and that these are wonderful discussions about these sort of policy measures,” Sue Sheridan, CFTP’s president and chief counsel, told TransmissionHub July 25. However, she added, “they should be taking place in Congress, and that’s what we hope will happen.”

Other draft resolutions from NARUC’s Committee on Electricity included a resolution regarding the enforcement of PURPA standards and regulations. The synopsis of that resolution says the measure calls attention to “FERC declaratory orders that override state interests and advises FERC to consider, [among other things], state action before suing on behalf of an industry stakeholder.”

A third resolution from the Committee on Electricity opposed a portion of President Barack Obama’s FY14 budget that would levy $2.4bn for cleanup of the U.S. Department of Energy (DOE) facilities used for nuclear weapons/defense programs, over and above funds already collected in prior years.

The final resolution says that “U.S. nuclear electric utilities and their customers should not be singled out yet again to pay for [decommissioning and decontamination] of DOE facilities developed for nuclear weapons and national defense programs,” though it makes clear that the committee supports cleaning up, decommissioning and decontamination such sites.

A resolution that originated in the Committee on Critical Infrastructure encouraged “state collaboration with entities that have cyber-threat management and mitigation expertise.”

Other resolutions deal with a range of topics, including educating customers about portable generator safety, encouraging investment in natural gas lines, and encouraging federal regulatory agencies to do more to protect consumers from unfair market practices.

In addition to the three resolutions on electricity and one on critical infrastructure, five resolutions focused on telecommunications, three on water, one on consumer affairs, one on natural gas, and one on utility marketplace access.