The Coalition for Fair Transmission Policy (CFTP) today told the House Subcommittee on Energy and Power that costs of new transmission projects driven by economic needs or public policy requirements must be allocated to customers in a manner proportional to the measurable benefits that customers receive from those projects.
"We thank the Committee for holding this hearing and their timely consideration of the broad implications of FERC's Order 1000 for the reliability and economics of our nation's electric systems," said Steve Transeth, representing the Coalition and principal partner at Transeth and Associates. "Order 1000 is deficient not so much for what it says, but more for what it doesn't say."
In his testimony, Transeth raised concerns and questions regarding the Order, in particular: the definition of "benefits," potential conflicts between required regional planning processes and local policies, and questions regarding the boundaries for the legal authority to implement the proposed changes.
The hearing focused on topics related to siting, planning, and allocation of costs for electricity transmission infrastructure as part of the Federal Energy Regulatory Commission's (FERC) Order 1000. In addition to CFTP, the subcommittee heard testimony from two panels of witnesses, including FERC Chairman Jon Wellinghoff, Lauren Azar, Senior Advisor to the U.S. Secretary of Energy, state commissioners from Michigan and Washington, utilities, and regional transmission organizations. Steve Transeth, a principal partner at a Michigan-based law firm specializing in energy issues, addressed today's subcommittee hearing on electric transmission.
To read Transeth's full written testimony and for more information on the hearing, please click here .
The Order's lack of guidance to regions as to how benefits should be defined, "will leave open the very real possibility that regions can adopt extremely broad definitions that result in unfounded conclusions that everyone benefits from new transmission and all should pay – thus socializing all transmission costs within a region – resulting in higher costs to customers who will subsidize large remote renewable projects and merchant transmission developers."
"The Coalition believes that transmission planning must be initiated at the local utility and state level, in a bottom-up manner, based on and driven by the needs of customers who bear the burden and received the benefits of new transmission," he continued.
As to how the Order can and will be implemented, particularly outside of areas served by regional transmission organizations, Transeth called attention to more than 60 rehearing petitions filed in response to the Order and stated "there are numerous questions and concerns remaining as to the boundaries of the Commission's legal authorities."
The Coalition has seven members, including CMS Energy Corporation, ConEdison, DTE Energy, Progress Energy, Public Service Enterprise Group, SCANA Corporation, and Southern 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.