FERC Proposes New Transmission Planning, Cost-Sharing, and Demand Response Collaboration
The Federal Energy Regulatory Commission (FERC) on Thursday took several actions to boost effective planning and cost sharing for new transmission lines. Measures included issuance of a Notice of Proposed Rulemaking (NOPR) for open access transmission reforms by establishing a closer link between regional electric transmission planning and cost allocation to help ensure that needed transmission facilities are actually built.
The NOPR (PDF) seeks comment on a rule that could require:
- Transmission providers to establish a closer link between cost allocation and regional transmission planning by identifying and establishing cost allocation methods for beneficiaries of new transmission facilities;
- Transmission planning to take into account needs driven by public policy requirements established by state or federal laws or regulations;
- Neighboring transmission planning regions to improve their coordination with respect to facilities that are proposed to be constructed in two adjacent regions and could address transmission needs more efficiently than separate intraregional facilities; and
- The removal from Commission-approved tariffs or agreements provisions that provide an undue advantage to an incumbent developer so that sponsors of transmission projects have the right, consistent with state or local laws or regulations, to build and own facilities selected for inclusion in regional transmission plans.
A significant aspect of the proposal is the requirement that transmission planning take into account public policy requirements, such as state-mandated renewable portfolio standards. “Doing so during the transmission planning process will help ensure these legal requirements are met in a way that is fair and efficient to transmission customers,” FERC said.
FERC Chair Jon Wellinghoff said that the national grid would need to “accommodate rising consumer demand for a more diverse mix of power generators and the sophisticated technology of the smart grid.” He added: “To do that, we must make sure FERC transmission policies are open and fair to all.”
Renewable industry groups hailed the NOPR. The American Wind Energy Association (AWEA) said in a statement that it was pleased FERC had “decided to use its existing authority under the Federal Power Act’s just and reasonable standard to address the important issue of transmission cost allocation.”
That group’s CEO, Denise Bode, said that wind energy is facing gridlock in a few regions that is holding up tens of thousands of megawatts of renewable power. “We therefore applaud and support FERC’s determination to work through stakeholder concerns and establish a policy that gets transmission built,” she said.
Comments on the NOPR are due 60 days after publication in the Federal Register.
Sharing Costs with the Highway/Byway Method
The regulatory agency on Thursday also approved a new "Highway/Byway" method of sharing costs for new electric transmission infrastructure in the Southwest Power Pool (SPP) region, which includes all or parts of Arkansas, Kansas, Louisiana, Missouri, Nebraska, New Mexico, Oklahoma, and Texas. This approach, which assigns costs of high-voltage transmission regionally and lower-voltage locally, is designed to help members build a stronger transmission grid that will benefit the entire region.
A National Action Plan on Demand Response
FERC last week released a report, two years in the making, that said public institutions and private sector organizations nationwide should form a coalition to help states, localities, and regions develop and deploy successful and cost-effective electric demand response programs.
According to the “National Action Plan on Demand Response,” (PDF) demand response refers to the ability of customers to adjust their electricity use by responding to price signals, reliability concerns, or other signals from the grid operator. Demand response can help avoid the need for new power plants and power lines that are intended primarily to meet peak power demands, the report said.
“There is strength in numbers. Coalitions harness the combined energy of individual organizations, producing results that can go far beyond what can be accomplished on an individual basis,” Wellinghoff said. “The success of this National Action Plan depends on all interested public and private supporters working to implement it.”
The Energy Independence and Security Act of 2007 required FERC to identify the requirements for technical assistance to states so they can maximize the amount of demand response that can be developed and deployed; design and identify requirements for a national communications program that includes broad-based customer education and support; and develop or identify analytical tools, information, model regulations and contracts and other materials for use by customers, states, utilities and demand response providers.
Sources: EERE, FERC, POWERnews