FERC's May 19 open meeting turned out to be positive for transmission developers, as FERC approved transmission rate incentives (or related settlements) for five transmission projects located from the Atlantic coast to the desert Southwest. The following projects were granted rate incentives under Section 219 of the Federal Power Act ("FPA"):
- The Atlantic Wind Connection, which is planned as a 250-mile underwater DC system that will run parallel to the Mid-Atlantic coast and gather up to 6,000 MW of offshore wind for injection into the PJM Interconnection.
- A pair of 345 kV projects under development by Ameren Services Co. that will increase transfer capability between Missouri and Illinois in the Midwest ISO region.
- Desert Southwest Power's 188-mile, single circuit 500 kV transmission project that will provide 1,200–1,500 MW of new transfer capability from eastern Riverside County, California to southern California load.
- Central Transmission's (an LS Power member) single circuit 345 kV Valley Project that will reduce congestion within the ComEd area of PJM Interconnection.
- FERC also approved a settlement regarding Green Power Express's formula rate for its proposed 3,000-mile, 765 kV transmission project in the Midwest. Green Power Express was granted transmission rate incentives in 2009.
In addition, FERC issued a Notice of Inquiry in which FERC is seeking comments on the scope and implementation of transmission incentives regulations and policies under Order No. 679. Since FERC issued Order No. 679 to implement Section 219 of the FPA nearly five years ago, FERC has received over 75 applications seeking transmission rate incentives for investments in over $50 billion in transmission infrastructure. To date, the vast majority of applications filed under Section 219 have proposed new transmission expansion rather than the improvement of existing infrastructure (the latter of which is also eligible for incentives). In this Notice of Inquiry, FERC is seeking comments on its implementation of Section 219 in the following areas:
- The rebuttable presumption for satisfying Section 219. Is it appropriate, and what other criteria should FERC adopt for applicants making this showing? What type of information should FERC consider in evaluating applications under Section 219 for applicants who cannot obtain the rebuttable presumption, and should there be established procedures for that type of applicant?
- What steps should FERC take to promote the other goals of Section 219, such as improvement, maintenance, and operations of transmission facilities?
- In an application under Section 219, a transmission developer must establish a nexus between the incentives sought and the risks and challenges of a project. What are the risks and challenges that transmission developers face today, and should FERC consider other criteria?
- The interrelationship of incentives, i.e., how FERC should consider the effects of certain incentives in evaluating whether to grant other incentives, as well as on the individual incentives that are currently available to applicants. Should certain incentives have eligibility requirements, and should FERC consider creating incentives through its general ratemaking process rather than on a case-by-case basis?
- What incentives will encourage the deployment of advanced technologies, and how should FERC determine if a technology is "advanced"?
Promoting Transmission Investment Through Pricing Reform, Docket No. RM11-26-000 (2011).
The list above is not exhaustive, and participants are encouraged to submit additional information or comments on FERC's transmission investment policies.