Non-jurisdictional TOs concerned about effects of Order 1000

Even though they are not subject to FERC jurisdiction, many non-jurisdictional transmission providers are bracing for the effects that FERC Order 1000 will have on their operations, their costs and ultimately, their customers, panelists said during the National Association of Regulatory Utility Commissioners’ (NARUC) 125th Annual Meeting in Orlando, Fla., Nov. 17.

An attorney who represents municipal utilities and co-operatives, most of which are non-jurisdictional, said during a panel discussion before the staff subcommittee on electricity for NARUC that Order 1000 will increase the costs those organizations pay, even if they are not otherwise affected by the order.

“Virtually every non-jurisdictional transmission owner takes service from regulated transmission providers,” Harvey Reiter, an attorney with the firm Stinson Morrison Hecker, said. “There are substantial costs of implementing Order 1000, and they will share in these cost burdens to the extent that these costs are included in the cost of service from the transmission providers.”

Reiter also said the non-jurisdictional transmission providers that join a regional planning process, including public utilities that are obligated to enter into a binding regional planning agreement, will see their costs increase even more.

“Many utilities are already coordinating planning with one another,” he said. “They have lots of meetings to attend, lots of forms to fill out, but Order 1000 raises this to a whole additional level.”

Another panel member agreed that the costs of initiating a regional planning process in an area where one may not currently exist has resulted in sticker shock.

“[On] the idea, in the non-RTO regions, of enacting a planning process than would cost $2.5m to run every two years, people are still having a hard time coming to terms with that,” Dan Kline, director of strategic transmission initiatives for Xcel Energy (NYSE:XEL), said.

His company has operations in RTO and non-RTO regions.

Other facets of the order will also result in higher costs from additional layers of complication imposed by the order, including the cost allocation mandated by Order 1000.

Reiter said many of his client companies have concerns that are also shared by jurisdictional utilities, including concerns over quantifying and valuing benefits derived

“This rule may do more harm than good because of some of the complications imposed, in particular by the cost allocation mandate and all the costs that go with establishing this additional layer of the many aspects of Order 1000,” he said.

Another attorney whose clients also include several non-jurisdictional transmission owners said that, in many ways, public power providers and cooperatives, which are largely non-jurisdictional, have been supportive of several functions outlined in Order 1000. Those include transmission expansion, regional planning with appropriate cost allocation to actual beneficiaries, bottom-up planning to meet the needs of load-serving entities, and joint transmission ownership with investor-owned utilities (IOUs), attorney Randy Elliott with the firm Miller, Balis O’Neil, said.

However, Elliott said they are generally not supportive of transmission for renewable energy unless there is a showing of a “non-trivial, quantifiable benefit” from that transmission. They do not want merchant transmission developers exempted from regional transmission planning processes, and they do not support expanding FERC authority, as many characterize Order 1000 as accomplishing.

Many non-jurisdictional transmission owners and other organizations have joined the numerous court actions opposing Order 1000. Those actions are now pending before the United States Court of Appeals for the District of Columbia Circuit (Docket No. 12-1232). Final briefs are due in the case on Dec. 13, and a schedule for oral arguments is likely to be published shortly after the first of the year, the chief clerk of the court recently told TransmissionHub.