Non-incumbent transmission developers scored a big win last week.  As we previously reported here, the D.C. Circuit Court of Appeals upheld FERC’s Order No. 1000.  Among other things, Order 1000 mandated that a regional transmission planning process consider projects proposed by non-incumbent developers.  FERC required that public utility transmission providers remove certain rights of first refusal from their federal tariffs and contracts, thereby eliminating their automatic right to construct transmission facilities within their service territories.  In the wake of Order 1000, regional transmission planning groups across the country have adopted a variety of competitive processes for selecting transmission proposals and assigning construction rights.  The court held that FERC has the authority to require federal ROFR elimination and rejected arguments that the relationship between the ROFR and FERC-jurisdictional rates is too attenuated to trigger FERC’s Federal Power Act section 206 authority or that it violates the Mobile-Sierra doctrine. 

Non-incumbent developers have become increasingly active over the last few years.   Hannes Pfeifenberger of The Brattle Group has identified at least 10 different business models being pursued.  These include transmission partnerships with incumbents (ITC, AEP), public-private partnerships (MATL, Transbay Cable, Path 15), new-build independents (Anbaric, TransElect, AWC), merchants (Zephyr, SunZia, Neptune), transmission bundled with renewables (NextEra, Res Americas), transmission subsidiaries (AEP), spin-off into quasi-ITC (ATC), independent acquisitions (ITC), passive investment (private equity), and investments in developer (Cleanline, Path 15).  Some of these are incumbent-affiliated companies looking beyond their parent’s footprint.  The latter include AEP, National Grid, SCE, Duke and ATC. 

Non-incumbent transmission companies, this decision is for you.