October 6, 2010 —A diverse group of stakeholders from across the country is calling on the Federal Energy Regulatory Commission (FERC) to require regions to presume that extra high voltage (EHV) transmission facilities of 345kV and above provide broad regional benefits for cost allocation determinations.
The stakeholders, a group of renewable energy advocates, environmentalists, utilities and transmission developers, voiced their collective support for FERC’s proposed rule, which would necessitate that regional transmission planning processes account for energy policy objectives as well as establish cost allocation methodologies that require consideration of a broad range of transmission benefits reliability, congestion relief and national energy goals.
The proposed rule, which is expected to be finalized in the spring or summer of 2011, seeks comment on how best to determine cost obligations for transmission customers and what benefits are appropriate to consider.
In response, Charles River Associates, Inc. (CRA) supplied a technical analysis on the regional impacts of EHV transmission facilities throughout much of the United States. The analysis stated: “The results of the study provide compelling evidence that as a class, transmission facilities 345 kV and higher have a significantly greater impact on regional power flows than lower voltage facilities across a range of different regions.”
The stakeholders support FERC’s approach for determining who pays for needed transmission facilities. This “cost causation” principle, they argue, strikes the appropriate balance. It protects customers from being forced to pay for facilities they neither need nor benefit from, while also ensuring that all the network upgrade costs are not directly assigned to a single generator simply by virtue of when that customer was connected to the grid.
FERC’s rule responds to concerns that facilities needed to connect remote energy resources are being delayed or prevented by planning processes that do not consider public policy requirements such as state renewable requirements, otherwise known as Renewable Portfolio Standards (RPS). By clarifying that “policy objectives,” such as state RPS mandates, are key criteria to consider in transmission planning, FERC is supporting a more robust process that will facilitate renewable energy development.
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