On September 12, 2011, Federal Energy Regulatory Commission ("FERC" or "Commission") staff hosted a technical conference via phone that summarized some of the key requirements presented in Order No. 1000 (the "Rule"). The purpose of the teleconference was to provide general guidance rather than delve into the definition of terms or other specific items better dealt with through rehearing requests. 

The first topic was Regional Transmission Planning and Public Policy. The Rule requires public utility transmission providers ("transmission providers") to participate in a regional transmission planning process that results in a transmission plan. That process must comply with existing Order No. 890 transmission planning principles: (1) coordination; (2) openness; (3) transparency; (4) information exchange; (5) comparability; (6) dispute resolution; and (7) economic planning. The Rule does not specify that that planning process include a particular set of analyses, only that it conform to the listed principles. One additional principle or planning requirement is that regional and local transmission planning processes consider transmission needs driven by Public Policy Requirements ("PPR), i.e., state and federal regulations. The Rule requires public utility transmission providers to amend their Open Access Transmission Tariffs ("OATTs") to describe general procedures for considering PPRs; it does not require the identification of any particular transmission need driven by any particular PPR. If in practice the OATT procedures identify no transmission needs driven by PPRs, the transmission providers are under no obligation to evaluate potential PPR-driven transmission solutions. The Rule requires transmission providers to post on their websites an explanation of which transmission needs driven by PPRs will be evaluated for potential solutions in the local or regional transmission planning process, as well as an explanation of why other suggested transmission needs will not be evaluated. The Rule does not require creating a separate class of transmission projects for PPR compliance, but does not prohibit it. FERC will not evaluate particular PPRs; the focus is on the process used to consider the PPRs.

The second topic was Non-Incumbent Transmission Developers. The Rule directs transmission providers to remove from their OATTs, or other Commission-jurisdictional tariffs and agreements, any provisions that grant a federal right of first refusal to transmission facilities that are selected in a regional transmission plan for purposes of cost allocation. There are three exceptions: local facilities, upgrades, and construction of transmission facilities. Each transmission provider must create qualification criteria to determine an entity's eligibility to propose a transmission project, whether that entity is an incumbent transmission provider or a non-incumbent transmission developer. Although there is no one recommended approach, the qualification criteria must be non-discriminatory, must allow a developer to show that the developer has financial resources and technical expertise, and must be identical to other qualification criteria within a region. Each transmission provider must revise its OATT to identify: (1) the information that must be submitted by a prospective transmission developer; and (2) the information due date to be considered for each regional transmission planning cycle. The information requirements must walk the line between being detailed enough to allow comparison to incumbent developers, yet not be unduly burdensome. Each transmission provider must amend its OATT to describe the evaluation process used in selecting a proposed transmission facility in the regional transmission plan for purposes of cost allocation. The evaluation process must be sufficiently detailed to show stakeholders why a project was or was not selected. Each  provider must also describe the circumstances under which it will reevaluate the regional transmission plan to determine if delays in the development of a transmission facility selected in a regional transmission plan for purposes of cost allocation require evaluation of alternative solutions. 

The third topic was Interregional Coordination and Cost Allocation. To achieve interregional coordination, the Rule requires neighboring transmission planning regions to share information regarding the respective needs of each region and potential solutions to those needs. Neighboring regions must also identify and jointly evaluate interregional transmission facilities that may provide more efficient or cost-effective solutions to those regional needs. More specifically, the Rule requires that neighboring planning regions within the same interconnection develop procedures for sharing information, implement procedures and describe methods by which neighboring regions will identify and jointly evaluate transmission facilities, exchange planning data, and maintain a website or email list for the communication of information. Additionally, compliance filings must describe of the type of transmission studies that will be conducted to enhance interregional cooperation. 

Compliance with the Rule requires that interregional and regional costs be allocated according to the following six allocation principles:

  1. Costs must be allocated in a way that is roughly commensurate with benefits.
  2. There can be no involuntary allocation of costs to non-beneficiaries.
  3. If a benefit-to-cost ratio threshold is used to determine which transmission facilities have sufficient net benefits to be selected in a regional transmission plan for the purpose of cost allocation,it must not be so high that transmission facilities with significant positive net benefits are excluded from cost allocation. A threshold is allowed, but it may not mandate a benefit-to-cost ratio that exceeds 1.25 unless the transmission planning region or transmission provider receives Commission approval. 
  4. Allocation must be solely within transmission planning region(s) unless those outside voluntarily assume costs.
  5. The method for determining benefits and identifying beneficiaries must be transparent.
  6. Different cost allocation methods for different types of transmission facilities (such as those for reliability, congestion relief, or to meet PPRs) are permitted in a regional transmission plan, but each method must be set out clearly and explained in detail in the compliance filing.

FERC is not advocating any one cost allocation method, only that the chosen method conform to the allocation principles. If a region cannot agree on a cost allocation method, and the efforts to attempt compliance are documented, the Commission will decide based on the relevant record. Participant funding is permitted, but it cannot serve as the regional cost allocation method.

FERC staff also identified the following compliance contacts for future questions:

  • Zeny Magos, Energy Industry Analyst (OEMR) 202-502-8244
  • Chris Thomas, Energy Industry Analyst (OEMR) 202-502-8412
  • Jesse Hensley, Energy Industry Analyst (OEMR), 202-502-6228
  • Partha Malvadkar, Economist (OEMR), 202-502-6332