EEI, utilities want first crack at transmission development as FERC mulls new rules, incentives

EEI, utilities want first crack at transmission development as FERC mulls new rules, incentives

Justin Sullivan via Getty Images One of the key questions the Federal Energy Regulatory Commission must decide as it considers making sweeping changes to its transmission rules is whether competition will advance transmission development.

The answer to the question could affect utility investments, consumer electric bills and the pace of the renewable energy buildout on the U.S. grid.

U.S. transmission investment grew to $170.1 billion in 2020, up from $95.2 billion in 2014, with only about 3% of transmission projects coming through competitive bidding and about a quarter of the spending occurring in the PJM Interconnection’s footprint, the Electricity Transmission Competition Coalition (ETCC) said in an Oct. 13 filing at FERC in response to the commission’s advanced notice of proposed rulemaking on transmission (RM21-17). Utilities want right of first refusal for planned projects

Utilities and the Edison Electric Institute, a trade group for investor-owned utilities (IOUs), urged FERC to give incumbent utilities the right of first refusal (ROFR) to build regional and inter-regional transmission projects without a bidding process.

The request could upend part of FERC’s decade-old Order 1000 , a landmark decision governing transmission planning and cost allocation that sought to open transmission construction to competition.

In the order, FERC withdrew the ROFR for incumbent utilities for regional or inter-regional transmission projects that could have their costs shared across the region. However, the utilities were allowed to continue spending on "immediate need" projects and making upgrades to their systems without going through a bidding process. Some states, such as Minnesota and Texas, passed laws reinstating the ROFR for their utilities.

"Rather than resulting in lower rates and increased transmission build, the removal of the federal ROFR has resulted in uncertainty, increased costs and increased delays," EEI told FERC .

Competitive processes for transmission projects stifled cooperation and collaboration between transmission owners and regional planning entities, the trade group said. They also made it more difficult and expensive to plan regional transmission projects, according to EEI.

"Reinstating the federal ROFR will address the inefficiencies caused by the competitive process and help get needed transmission built in a cost-effective, timely manner as it allows the entities with the expertise, the knowledge of the existing system, the relationship with customers and regulatory agencies and the obligation to provide safe reliable service to build the lines selected in the regional process," EEI said.

Being required to hold solicitations for regional projects would "significantly" delay meeting clean energy goals, according to […]

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