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Springtime at the Law Offices of Carolyn Elefant |
 Spring has nearly sprung in Washington D.C., with cherry blossoms just around the corner. This season, my firm finds itself busy on a variety of issues in several different forums beyond my standard FERC practice. Here's a small sampling of some recent matters:
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Serving as local counsel in two cases, and lead counsel in two cases all before the D.C. Circuit. Three of the cases involve judicial review of FERC orders, while the fourth presents as a direct appeal to the D.C. Circuit (my first) under Section 19(d) of the Natural Gas Act.
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Representation of petitioners in a FOIA action against FERC in federal district court for the District of Columbia
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Representing QF in a PURPA enforcement petition at FERC
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Assisting several companies in FERC permit and license matters for marine and hydrokinetic projects
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Participating in a project and two roundtable/symposium on constitutional issues (commerce clause and preemption) and clean energy
 In addition to cherry blossoms, another sign of spring in Washington D.C. (at least for me) as co-founder of and counsel to the Ocean Renewable Energy Coalition is our annual Global Marine Renewable Energy Conference (GMREC) to be held on April 10-11 here in DC. Now celebrating its sixth anniversary, GMREC is a fabulous conference with lots of opportunities to come up to speed on this emerging industry and network with leaders from all over the globe at a Scotch tasting and embassy parties. You can register here. Finally if you haven't done so already, mark your calendar for my colleague Scott Hempling's Current Topics in Electricity Seminar on June 3-4 (details here).
In the meantime, this newsletter brings a bit of spring break reading for you - an overview of the public policy planning and cost allocation requirements in Order No. 1000. If you have any questions or comments, or would like assistance with any Order 1000 compliance matters, drop me an email at carolyn@carolynelefant.com. Be sure to ask about my flat fees and other incentive rates that can make participation at FERC and related matters more affordable than you ever thought.
Happy Spring!
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My Safari through Order 1000 Filings and Public Policy Cost Allocation |
 In anticipation of FERC rulings at its upcoming March 21, 2013 meeting on the Order No. 1000 compliance filings by the majority of the ISO/RTOs, I finally decided to take a sojourn through the proposals. Let's just say that slow going hardly begins to describe my slog through each tariff's terrain, dense with muddy explanations and tangled redlined or blue-lined forests of text. Whether or not one supports Order No. 1000's goals, this process isn't regulation's finest hour. Somehow, there's got to be a better way to tame this jungle of redundancies and plodding text - perhaps through use of visual guides such as flow charts, forms or diagrams.
In any event, now that I've completed my safari through Order No. 1000, I'm ready to share the treasures of my trip. Specifically, I'd gone in search of the Order No. 1000 provisions related to consideration of public policy needs during transmission planning and cost allocation of public public driven projects. The results for organized markets are depicted in the table below (I dared not venture into the unchartered territories of newly established planning regions).
To access the six regional filings discussed in the chart above, click here.
Below are some of my observations about each region's compliance filings, as well as some thoughts on how they'll be received by FERC.
Proposals reflect geographic diversity
First, the compliance filings do indeed reflect the type of regional diversity that the Commission hoped to preserve in adopting Order No. 1000. PJM's plan includes a supplemental option for inclusion of public policy projects proposed by states that are either paid for by retail customers or allocated between sponsoring states and recovered pursuant to a FERC accepted cost allocation. As explained by PJM, the supplemental option (which is in addition to the standard mechanism for including public policy considerations in regional planning) acknowledges the differences in needs between PJM's RPS and non-RPS members.
But will PJM's supplemental proposal withstand the criticism that it is nothing more than a noncompliant participant-funded mechanism cloaked in public policy robes? I predict FERC approval given that PJM's supplemental option is in addition to an already compliant planning process and was devised to accommodate the disparate policies of PJM states consistent with FERC's desire to protect regional diversity.
Meanwhile, SPP's policy also contains its own geographic quirk. Home to an abundance of wind generation, SPP's Order No.1000 compliance filing provides an allocation formula of 2/3-regional/1/3 local for byways (i.e., line less than 300 kV) associated with wind generating facilities, in contrast to the 1/3 regional/2/3 local cost allocation for all other byways. As SPP's cost allocation methodology was previously approved, there's no reason to expect that FERC will act any differently here.
Definition of public policy
In Order No. 1000-A, FERC clarified that public policy is defined as requirements established by local, state or federal laws including duly enacted statutes or regulations promulgated by a relevant jurisdiction whether within a state or at the federal level. Yet only SPP's tariff includes local requirements within its definition of public policy. MISO's public policy definition is linked to the percentage of power produced by a type of generation (code for RPS, I suppose) while NE-ISO's filing did not appear to include a definition (of course, NE-ISO's filing has an obstinate tone, having been made under protest that any revisions will violate Mobile Sierra - so including a definition of public policy was the least of NE-ISO's worries). FERC takes this definition seriously -- in last month's order on Maine Public Service Commission's compliance filing, the Commission faulted the company for failing to include a definition of public policy in its tariff (notwithstanding that the Order No. 1000 definition was referenced in the submittal letter). My guess is that FERC will direct revisions to the definitions in some of these submissions.
Consideration of public policy in planning
The regions adopted different approaches to consideration of public policy in transmission planning. Many - like MISO, PJM and SPP - took a holistic approach, integrating public policy factors along with economics and reliability as part of the planning process. Others like NYISO and CAISO seem to evaluate policy-driven needs separately. Either approach is fine by FERC, so long as public policy needs are considered and stakeholders have opportunity to play a part in identifying public-policy projects.
Cost allocation of public policy driven projects
For those regions that take public policy into account along with reliability and economics, there's no real need to quantify public policy benefits separately. Thus, PJM and SPP (both of which use the holistic approach) have cost allocation methodologies based on line voltage, with larger lines presumed to confer more of a regional benefit. MISO's cost allocation scheme has come under more controversy - it establishes a category of "multi-value projects" that reliably and economically serve public policy goals and which are subject to one hundred percent regional cost allocation. MISO's MVP cost allocation policy, previously approved by FERC, is currently under challenge by the Illinois Commerce Commission and several others at the DC Circuit. ICC v. FERC, Docket 11-3421 et. al.
Other regions, like NYISO, developed a separate cost allocation methodology for public policy projects and developed metrics for assigning benefits. Of course, spreading public policy benefits in a one state region like New York or California is easier because generally, state residents benefit equally from state policy. By contrast, quantifying and allocating public policy benefits is more challenging in multi-state regions where states may have different policy goals, including avoiding new transmission entirely through distributed generation or conservation.
Non transmission alternatives
Most regions declined to establish a separate process for proposal of non-transmission alternatives (NTA). Instead, in most instances, NTAs are considered as part of the needs analysis - meaning that if there are sufficient NTAs to meet a region's transmission needs, including public policy needs, construction of new transmission will be delayed or deferred.
I'll be tracking the outcome of the cases on the docket. Meanwhile, if I'm feeling particularly intrepid (or more accurately, like a glutton for punishment), I hope to explore a few of the other Order No. 1000 filings from non-RTO markets before the interregional cost allocation submissions, which are due on July 10, 2013 following FERC's grant of a 90-day extension. Stay tuned...
Much as Order No. 1000's recommendation for including public policy considerations in transmission planning will drive renewables, so too will other FERC policies. Here's a slide deck from my recent presentation, Order No. 1000 and Beyond.
If you're curious about Twitter, here's a recent sample feed from our account, NxtGenEnergyLaw:
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