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On June 17, 2021, the Federal Energy Regulatory Commission (“FERC” or “Commission”) published two issuances in an effort to facilitate electric transmission development nationwide. 

First, recognizing that federal and state regulators each have authority over transmission-related issues, the Commission identified this area as ripe for federal-state coordination and cooperation. Accordingly, pursuant to its authority under Section 209(b) of the Federal Power Act, the Commission established a Joint Federal-State Task Force on Electric Transmission (“Task Force”).  The Commission stated that, to help facilitate fair and efficient transmission planning and financing, the topics the Task Force may consider include: (1) barriers to planning and development of transmission to achieve federal and state policy goals; (2) the Commission’s rules and regulations regarding cost allocation of transmission projects (the Task Force may identify recommendations for reforms); (3) barriers to efficient interconnection of new resources; and (4) ways to ensure cost-effective transmission investment.

Membership of the Task Force includes all FERC Commissioners and ten state commission representatives, who will be nominated by the National Association of Regulatory Utility Commissioners (“NARUC”).  The Task Force will convene for multiple formal meetings annually, and the Commission expects the initial public meeting to take place during Fall 2021.

Second, the Commission released a Policy Statement clarifying that voluntary agreements, i.e., agreements between: (1) two or more states; (2) states and public utility transmission providers; or (3) among public utility transmission providers to plan and pay for new transmission facilities (“Voluntary Agreements”) are not categorically precluded by the Federal Power Act or the Commission’s existing rules and regulations.  The Commission stated that developing cost-effective and reliable transmission facilities remains a priority for the Commission and that Voluntary Agreements can further these goals by allowing, inter alia, states to plan and pay for transmission facilities that are not being developed at all, or quickly enough, through the Order No. 1000 regional transmission planning processes.

The Commission also noted that Voluntary Agreements are not unprecedented, highlighting use of Voluntary Agreements by PJM Interconnection L.L.C and ISO New England.  The Commission invites interested parties to consult with Commission staff on any potential Voluntary Agreements.  To the extent stakeholders believe current tariffs bar the use of Voluntary Agreements, the Commission invites parties to submit filings to remove or address those barriers. 

In separate concurrences, Commissioner Danly noted that Voluntary Agreements still need to “pass muster” under both the Federal Power Act and the Commission’s rules, while Commissioner Christie pointed out that Voluntary Agreements do not need to be limited to only transmission, but could also be used to, for example, establish modern, innovative versions of power pools aligned with the member states’ public policies as to resource adequacy and preferences.  

The Order establishing the Joint Federal-State Task Force on Electric Transmission is available here, and the corresponding News Release is available here.

The Policy Statement on State Voluntary Agreements is available here, and the corresponding News Release is available here.

For further information, please contact Bhaveeta Mody, Sean Neal, Kristen Connolly McCullough, or Sylwia Dakowicz.

June 30, 2021