FERC snubbing states under Order 1000 — NARUC

Source: Hannah Northey, E&E reporter • Posted: Monday, July 29, 2013

A federal effort to revamp the way the grid is planned and paid for could encroach on states’ rights to oversee the electric grid, a group of state commissioners warned this week.

The National Association of Regulatory Utility Commissioners took aim at the Federal Energy Regulatory Commission’s implementation of a far-reaching new rule, Order 1000, which overhauls the process for planning and allocating the cost for new transmission projects.

The rule also sets out principles that transmission planners must comply with, including regional coordination, cost allocation and the consideration of state and federal policies such as renewable portfolio standards.

NARUC’s board of directors adopted¬†resolutions¬†at the group’s summer meeting in Denver this week that found that FERC is failing to recognize “the decisive role states and cooperative regional planning processes play” and that the process could actually delay new lines from being built and properly paid for.

The resolutions effectively formalize the group’s position and could underpin advocacy work before the federal government.

One major point of contention that NARUC raised in filings in South Carolina was FERC’s requirement for the state utility commission to define its role within a tariff, or contract.

FERC “erred” by indicating that states are “mere stakeholders” and only roles defined in the tariff would be recognized, NARUC said. States are responsible for planning, siting and building new lines, and FERC has no authority to “pre-empt or otherwise conflict with state authority over” such matters, NARUC said.

The commission’s implementation of Order 1000 has also triggered concern at the agency itself, in the utility sector and among members of Congress.

Sen. Ron Wyden (D-Ore.), chairman of the Senate Energy and Natural Resources Committee, sharply criticized FERC last month for rejecting ColumbiaGrid’s proposal to make it voluntary for utilities in the Pacific Northwest to pay for regional transmission projects under Order 1000. Wyden vowed to take legislative action if the decision isn’t reversed (E&ENews PM, June 20).