On July 15, 2021, the Federal Energy Regulatory Commission (“Commission”) issued an Advance Notice of Proposed Rulemaking (“ANOPR”) seeking public comment on the potential need for reforms or revisions to existing regional transmission planning, cost allocation, and generator interconnection processes. Pointing to the transforming electricity sector, including growth of new resources seeking to interconnect to the transmission system and renewables located distant from load centers, the Commission seeks comments on whether and which reforms to the Commission’s regulations are necessary to ensure that transmission rates remain just and reasonable and not unduly discriminatory or preferential and that reliability is maintained. The Commission made clear it has not predetermined any specific proposal but seeks comments on potential reforms and welcomed commenters to offer additional or alternative proposals.
Within the category of regional transmission planning and cost allocation, the Commission seeks comment on whether transmission providers in each transmission planning region should amend their regional processes to plan for the transmission needs of anticipated future generation to meet a changing resource mix, including generation that is not yet in the interconnection queue. Questions raised in the ANOPR pertaining to regional transmission planning include: whether changes are needed with respect to future scenario modeling, if transmission providers should be required to model geographic zones with high potential for renewable generation development to facilitate interconnection of such resources; whether and how to expand or improve any incentives to incent regional facilities that demonstrably may offer a more efficient or cost-effective solution to an identified need than local alternatives; whether reforms to the interregional transmission coordination processes are warranted, including potentially requiring interregional transmission planning; and whether reforms are needed to improve the coordination between regional transmission planning and generator interconnection processes.
As it concerns cost allocation in regional transmission planning processes, questions for comments raised in the ANOPR include which criteria should be considered, how to allocate costs associated with new transmission infrastructure, and how to square cost allocation with state and local transmission policies.
With respect to the generator interconnection processes, the ANOPR seeks comments on issues such as whether changes are necessary to account for the rising tide of renewables and to cut down on speculative generator interconnection requests; and whether participant funding of interconnection-related network upgrades remains just and reasonable in light of changed circumstances, including whether cost allocation of such upgrades entirely to interconnection customers without accounting for benefits to transmission customers is consistent with the cost causation principles. Relatedly, the Commission seeks comments on whether the crediting policy in all regions should be revisited and if so, whether it needs to be reformed to prevent the costs of interconnection-related network upgrades from being unjustly and unreasonably allocated to interconnection customers and whether such allocation creates a barrier for entry for generation developers. The Commission also seeks comment on whether a fast-track generator interconnection process should be developed to facilitate interconnection of generating facilities that have firmly committed to connecting to new regional transmission facilities. The Commission requests comment on the potential for Grid-Enhancing Technologies (i.e., storage and advance line rating management technologies) and whether the Commission should require that transmission providers consider such technologies in interconnection studies.
In terms of oversight, the Commission also solicits comments regarding whether there is need for enhanced oversight of transmission planning and spending (for example, by establishing an independent entity to monitor the planning and cost of transmission facilities in the region). The Commission also seeks comment on whether there is sufficient clarity on the roles and responsibilities between state and federal regulators regarding local transmission planning and inquires into whether a state-led committee should be established.
Comments will be due 75 days after the ANOPR is published in the Federal Register, and reply comments are due 105 days after publication in the Federal Register.
The ANOPR: Building for the Future Through Electric Regional Transmission Planning and Cost Allocation and Generator Interconnection, Docket No. RM21-17-000, is available here, and the corresponding News Release is available here.
For more information, please contact Michael Postar, Lisa Gast, Sean Neal, Bhaveeta Mody, Kristen Connolly McCullough, or Sylwia Dakowicz.
