Week Ending June 18, 2021

Transmission Steps by FERC Include Task Force With NARUC, New Policy Statement

This Article Appears as Published in Foster Report No 3354
Transmission Steps by FERC Include Task Force With NARUC, New Policy Statement

A joint task force with state regulators and a policy statement encouraging voluntary agreements are two steps regarding transmission issues that FERC announced at the June 17 open meeting, but Chairman Richard Glick has more in mind for later in the year.

As he has at other events, Glick mentioned cost allocation, interregional transmission planning, impediments to transmission development and grid interconnection issues that he hopes to address eventually.

For the immediate future, however, engaging with state regulators and working with the National Association of Regulatory Utility Commissioners (NARUC) on issues of mutual interest was the focus of discussion at the FERC meeting. It is hard to see any kind of success on transmission matters without meaningful engagement with NARUC, and the joint task force is designed to bridge the state and federal regulatory divide on different issues, Glick said. “We want to sit down with the states” and work on solutions together, he said, outlining the plan he previewed during the May open meeting.

“The time is ripe for greater federal-state coordination and cooperation,” NARUC and FERC said in a joint statement after approval of the order establishing the task force. “Our shared authority over how to plan and pay for transmission infrastructure and the rapid pace of the energy transition have made such collaboration an imperative for all of us,” said Paul Kjellander, president of NARUC and of the Idaho Public Utilities Commission.

FERC and NARUC dubbed the effort a “first-of-its-kind” task force, though there have been less formal collaboratives between FERC and state regulators over the years, including one involving demand response resources and another on competitive procurement of power supplies roughly 15 years ago.

The task force will be made up of 10 state regulators and the five FERC commissioners, and will hold meetings in public. It will use a FERC docket (AD21-15) to provide stakeholders and interested parties the ability to comment on the record.

Describing the order establishing the task force, FERC staff said it seeks nominations from NARUC within 30 days for the 10 state regulatory positions on the task force. Those 10 state representatives would join the five FERC commissioners and a subsequent announcement will be made listing roles and logistics for the first public meeting. That first meeting is expected to be in the fall.

Besides the task force, another other transmission item is a policy statement (PL21-12) clarifying that states and transmission providers may enter into voluntary agreements to plan and pay for transmission facilities. Such voluntary agreements could provide a way for entities to prioritize, plan and pay for transmission facilities that are not being developed as envisioned under FERC Order 1000.

The policy statement aims to address concerns that the Federal Power Act or FERC policies interfere with creation of voluntary agreements and notes that FERC is open to creative arrangements to overcome barriers stifling transmission development, FERC staff explained.

The moves were welcomed by several groups, including renewable resource owners. The Solar Energy Industries Association and the American Council on Renewable Energy issued statements applauding the steps taken by FERC and NARUC. The policy statement on voluntary agreements clarifies that states wishing to find workarounds on the “Gordian Knot” of transmission planning and cost allocation are able to do so, said Greg Wetstone, president and CEO of ACORE.

“These  two actions are down payments on the substantial transmission policy reforms we hope to see later this year. States are important partners in this work, and reforming transmission planning and cost allocation would be the most impactful thing the Commission could do” to accelerate deployment of renewable resources and tackle climate change, Wetstone said.

During a press conference after the meeting, Glick said he hopes the FERC-NARUC task force will have the ability to craft solutions on regulatory challenges and some of the difficult issues associated with transmission development. If creative ideas crop up during the meetings with state regulators, it will be easier to move on them together, he said. Glick envisions laying out a broader agenda for the group relatively soon.

The order establishing the task force says state representatives will serve one-year terms and would not serve more than three consecutive terms. It seeks two state representatives from each NARUC region to account for different transmission-related views among different parts of the country. A subsequent order from FERC will list the state members of the task force, their roles and provide the timing and location for the first public meeting.

“State commission representatives will sit in an advisory capacity,” according to the order. The task force can make recommendations to FERC on possible changes to Commission regulations, present ideas at a monthly FERC open meeting and develop a record to be included in FERC and/or state regulatory proceedings.

While 10 nominations are sought from the states, all state commissions will be invited to suggest agenda topics for the public meetings and to provide comments on topics discussed at the meetings. Multiple meetings are to be held annually, with FERC issuing orders on the time, location and agenda for each meeting, based on consultation with state commissions and task force members.

The voluntary agreements enabled through the policy statement is another way to foster “creative thinking” about some of the vexing issues that have stymied transmission investments, Glick added during the press conference. The policy statement “is not earthshattering” in that it essentially reminds states that the voluntary agreement path is available if they want to consider it with different stakeholders, he said.

Commissioners Mark Christie and James Danly concurred on the policy statement order. Danly did not speak on the matter during the meeting but Christie did, noting that states have a lot of options available through voluntary agreements, not just limited to transmission issues. States that share public policy goals or that want to collaborate outside of an independent system operator process can pursue options through voluntary agreements, and the policy statement reminds them of those opportunities, Christie said.

Commissioner Allison Clements said she is encouraged by the steps to make progress on transmission development with state regulators included early in the process. Simply rebuilding the grid of the past is not ideal given the reliability needs and clean energy advancements of the past few years, Clements said. She expressed a desire not just to have infrastructure investment but the right infrastructure added to meet policy and consumer goals.

Commissioner Neil Chatterjee did not participate in the two items, as his term approaches expiration June 30 and he considers job opportunities. Chatterjee can remain at FERC until a replacement takes his spot or through the end of the Congressional session, and he said he has not determined when he will leave the Commission.

During the meeting, FERC staff explained that the joint task force will seek to find solutions to barriers hindering grid enhancements, develop regional plans, improve grid interconnection processes and examine ways to ensure grid investments are cost effective.

The task force is being formed under Federal Power Act Section 209(b), which authorizes FERC to confer with state regulators on matter of jurisdiction relevant to both states and the Commission.

By Tom Tiernan ttiernan@fosterreport.com


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