The Coalition for Fair Transmission Policy said new electric transmission facilities needed for reliability, economic savings, and satisfying public policy requirements must be developed both in a cost-effective manner for consumers and consistent with wholesale market competition.
In comments filed with the Federal Energy Regulatory Commission, the Coalition asserted that the beneficiaries of new transmission projects should bear the cost of those projects. Coalition president and chief counsel Sue Sheridan said current bottom-up collaborative planning processes established through FERC Order 890 and the current cost allocation processes are generally working well.
Current activity bringing new electric transmission facilities online underscores that viewpoint, according to the Coalition. According to industry reports, $9.7 billion is being invested in new transmission this year and $11 billion is slated for 2011, a doubling in annual investment since 2004. Currently there are $39 billion worth of high-voltage interstate projects and $37 billion of additions or upgrades related to the integration of renewable energy being planned or constructed.
"The 'beneficiaries pay' framework outlined in the Notice of Proposed Rulemaking is the correct guiding principle," Sheridan said. "This ensures transmission development at the lowest reasonable consumer cost as well as providing the greatest local responsiveness and economic efficiency".
"The impact on consumers must be the Commission's first consideration — not transmission companies, clean energy developers, wind turbine manufacturers, or utilities," Sheridan continued. "Consumers should not pay for transmission projects that deliver no economic or reliability benefits to them, only to be saddled with higher utility bills."
"Socializing transmission-line building costs for sending power long distances will subsidize clean energy producers in some regions while hurting economically advantageous clean energy producers nearer the customers served," Sheridan added. "That approach may lead to the wrong clean energy choices and increased electricity prices for everyone."
The Coalition strongly supports the Commission's endorsement of "bottom-up planning" for transmission facilities, beginning at the local and regional level, advocating that the Commission's policy should build on existing successful, coordinated, and transparent regional processes.
The Coalition provided recommendations to strengthen the proposed rules in several areas, believing that:
- The Commission should ensure that state regulatory prerogatives are not pre-empted. Local needs should be satisfied based on state legislature and state regulatory policy choices, not those made on their behalf during regional planning processes.
- The Commission should not require regional planning processes to consider non-mandated public policy requirements.
- Only economic and reliability benefits that can reasonably be projected in planning and other modeling studies should be considered in determining cost allocation. Generalized "social benefits," or speculative benefits are not rational or sufficient for cost allocation.
- The Commission should allow flexibility so that projects not fitting into pre-determined cost allocation rules are not precluded from being considered in regional planning processes.
The Coalition has 10 members including CMS Energy Corporation, Con Edison, Inc., DTE Energy Company, Northeast Utilities, PPL Corporation, Progress Energy Inc., Public Service Enterprise Group, SCANA Corporation, Southern Company and United Illuminating Company. More than 28 percent of U.S. electric customers, representing 26 states, are served by utilities and companies which are either formal members of the Coalition or are on record supporting the group's goals.