FERC, in a recently issued order, established a proceeding to determine whether the PJM Transmission Owners are complying with their FERC Order No. 890 obligations, noting that it is concerned that the transmission planning process governed by the PJM Interconnection Operating Agreement is not providing stakeholders with the opportunity for early and meaningful input and participation in the transmission planning process, as required by Order 890.
FERC, in its order issued on Aug. 26, directed the PJM Transmission Owners to either propose revisions to the PJM Operating Agreement to comply with Order 890; revise their portions of the PJM Open Access Transmission Tariff (OATT) or their individual OATTs to comply with Order 890; or show cause why they should not be required to do so, within 60 days of the Aug. 26 order’s date.
FERC noted that in Order 890, it reformed the pro forma OATT to clarify and expand the obligations of transmission providers to ensure that transmission service is provided on a basis that is just, reasonable and not unduly discriminatory or preferential.
Order 890, FERC said, directed all transmission providers to develop a transmission planning process that satisfied nine transmission planning principles:
- Information exchange
- Dispute resolution
- Regional participation
- Economic planning studies
- Cost allocation for new projects
To satisfy the coordination principle, transmission providers are required to provide customers and other stakeholders the opportunity to participate fully in the transmission planning process, FERC said.
FERC further noted that it explained that that requirement means that transmission providers must facilitate the timely and meaningful input and participation of customers in the development of transmission plans and that “customers must be included at the early stages of the development of the transmission plan and not merely given an opportunity to comment on transmission plans that were developed in the first instance without their input.”
FERC also said that it required that transmission providers disclose to all stakeholders the basic criteria, assumptions and data that underlie their transmission plans and reduce to writing and make available the basic methodology, criteria and processes that the transmission providers use to develop their transmission plans. In addition, sufficient information must be made available to enable customers, other stakeholders, and independent third parties to replicate the results of transmission planning studies and thereby reduce the incidence of after-the-fact disputes regarding whether planning has been conducted in an unduly discriminatory fashion, FERC said.
FERC said that it also determined that the transmission-owning members of an RTO or ISO must participate in the transmission planning process and that the process must be open to transmission customers and other stakeholders. While FERC left it to the RTOs and ISOs to determine how to satisfy Order 890’s requirements, FERC observed that an RTO or ISO would not comply with Order 890 unless the RTO or ISO required the transmission owners within its footprint to engage in a transmission planning process that itself complied with the requirements of Order 890.
FERC added that according to PJM, PJM’s transmission planning procedures satisfies the directives of Order 890 with respect to PJM transmission owners that do not have their own OATTs on file and who have turned over to PJM operational control of their transmission facilities. FERC noted that in order to meet the specific service requests for certain transmission customers, and treat all customers comparably, PJM created a new category – Supplemental Projects – for transmission facilities developed under the local transmission owner planning processes.
According to PJM, PJM Transmission Owners are obligated to engage in transmission planning that complies with Order 890. PJM explained that the Supplemental Project category would be incorporated into the PJM planning process in a manner consistent with Order 890’s requirement that transmission projects be planned through a process that is open and transparent, FERC added.
FERC said that it found that PJM’s Order 890 compliance filing failed to specify with sufficient clarity how locally planned transmission projects fit into the PJM regional transmission planning process, and the commission directed PJM to modify the PJM Operating Agreement to, for instance, require each transmission owner’s local transmission plan to be made available on a website for review by the Planning Committee, the Transmission Expansion Advisory Committee, and the Subregional Regional Transmission Expansion Plan (RTEP) Committee.
FERC said that upon reviewing PJM’s subsequent compliance filing, it concluded that the filing continued to fall short of Order 890’s requirements, and directed PJM to provide the opportunity for stakeholders to review and comment on the criteria, assumptions and models used in local transmission planning activities prior to finalization of the “Local Plan” and on the Local Plan itself before it being submitted to the Subregional RTEP Committee.
The Local Plan, FERC said, is to include Supplemental Projects as identified by the Transmission Owners within their zone and Subregional RTEP projects developed to comply with all applicable reliability criteria.
PJM complied with that directive by revising the PJM Operating Agreement to expressly include, for instance, an opportunity for stakeholders through the Subregional RTEP Committee to review and comment on the transmission owner’s criteria, assumptions and models before finalizing the Local Plan. PJM also amended the PJM Operating Agreement to require that transmission owners provide their criteria and assumptions, including the models used in their Local Plan. FERC added that PJM has since reiterated that those procedures require that the regional and local transmission planning processes by fully integrated into PJM’s overall transmission planning process, and has clarified that the Local Plan is a product of the Subregional RTEP Committees rather than of the transmission owners alone.
FERC noted that it held last November a technical conference to examine PJM’s application of its transmission planning process to local transmission facilities. Discussions at that conference, and post-technical conference comments, raised concerns about whether PJM’s local transmission planning process was being implemented in a manner that is consistent with the PJM Operating Agreement and the requirements of Order 890. In particular, FERC added, some participants suggested that stakeholders lack the opportunity to participate meaningfully in the early stages of the transmission planning process for Supplemental Projects.
Based on the comments received at the technical conference, FERC said, it appears that some PJM Transmission Owners are conducting significant local transmission planning activities before the need for a Supplemental Project is brought to PJM for discussion in the stakeholder process. Additionally, certain PJM Transmission Owners appear to be identifying – and even taking steps toward developing – Supplemental Projects before providing any opportunity for stakeholders to participate in the development of those projects through the RTEP process, FERC said.
Among other things, FERC said, “[G]iven that Order No. 1000’s reforms were built on the foundation laid by Order No. 890 and that the PJM RTEP process necessarily relies, in part, on information from the PJM Transmission Owners’ local planning activities, we are also concerned that a lack of transparency in the PJM Transmission Owner’s local planning processes for developing Supplemental Projects could undermine PJM’s implementation of the Order No. 1000 reforms.”
The individual PJM Transmission Owners are responsible for providing such an opportunity through a transparent local transmission planning process that is on file with FERC, the commission said. Therefore, to the extent that stakeholders are not receiving the opportunity to participate meaningfully in the PJM transmission planning process with respect to Supplemental Projects, as FERC originally understood, then it is the PJM Transmission Owners’ responsibility to provide a remedy. However, FERC added, as with their original Order 890 compliance obligations, the PJM Transmission Owners may elect to satisfy that responsibility through a PJM-administered process that complies with Order 890.