The Delaware Public Service Commission staff on March 6 filed a petition requesting that the commission open a docket for the purposes of promulgating regulations establishing certification requirements for entities seeking to begin the business of an electric transmission utility in the state.
As noted in the petition, FERC in July 2011 approved Order 1000, which was intended to increase competition in the electric transmission industry. Order 1000, staff added, required competitive solicitation for determining construction responsibility for transmission projects, which had been historically built by incumbent utilities.
The competitive solicitation required by Order 1000 increases the possibility that an electric transmission company, which has never built transmission facilities in the state, could be assigned responsibility to build new transmission facilities in Delaware.
Staff added that Delaware Gov. John Carney on Feb. 14 signed House Bill (HB) 127, as amended by House Amendment No. 1, into law. The legislation requires persons or entities seeking to begin the business of an electric transmission utility in Delaware to first make application to the commission and obtain a certificate of public convenience and necessity (CPCN), staff said.
According to the bill’s original synopsis, as noted on the General Assembly’s website, HB 127 updates Title 26 relating to the requirements for obtaining a certificate to operate in Delaware as a new electric transmission utility. HB 127 uses language similar to certificate requirements for water, wastewater, and other utility services under the jurisdiction of the commission, the synopsis noted. Due to recent changes in federal law, certain projects will now be available to entities both in and out of state, the synopsis noted, adding that in order to perform that type of work in Delaware, a company will need to obtain a certificate from the commission. Currently, there are no qualifications defined for the commission to assess the impact a project of this nature will have on Delaware and its citizens, the original synopsis stated, adding that HB 127 will provide the commission with the necessary authority to assess that impact and revoke a certificate in the future for good cause.
In its petition, staff said that HB 127 outlines what the commission is to consider in determining whether to grant a CPCN application, including:
- Whether a transmission project is approved by PJM Interconnection
- The impact of granting the CPCN application on the state’s economy and benefits to the state ratepayers
- The impact of granting the CPCN application on the health, safety, and welfare of the general public
Staff added that HB 127 does not require any public utility to secure such a certificate for any construction, modifications, upgrades, or extensions within the perimeter of any territory already served by it – e.g., Exelon’s (NYSE:EXC) Delmarva Power – nor does it extend commission authority to transmission facilities impacting the Delaware Electric Cooperative or Delaware Municipal Electric Corporation.
Staff noted that the commission in 1999 took similar action to establish regulations for retail electric suppliers after the General Assembly approved customer choice in Delaware. The result of that process was PSC Regulation No. 49 Rules for Certification and Regulation of Electric Suppliers, staff said.