The Wires group today urged the Federal Energy Regulatory Commission to be stronger and more consistent in promoting a build-out of the transmission system -- at least until Congress enacts some new, more centralized, transmission planning and siting regime. (That is if Congress is able to agree on a regime. The forces seeking more federal, or at least more regional decision-making are strong, but states and utilities wary of it are also strong.)
Wires is the Working Group for Investment in Reliable and Economic Electric Systems. In a statement today, it lamented the New York Regional Interconnect's decision earlier this month to withdraw its state application to build the 190-mile line it wants to put from upstate to downstate. NYRI's reason was FERC's refusal to change a New York Independent System Operator rule requiring 80% of system stakeholders to approve a project. Since some important stakeholders oppose the project, NYRI knew it did not have a chance.
According to Wires, "FERC passed up an important opportunity to reassess whether rules like those that thwarted NYRI are fundamentally at odds" with open-access principles and what appears to be a growing demand for regional planning.
At the same time, however, FERC appears to be consistently supportive of proposed transmission projects by awarding many of them extra points on their rates of return. This policy doesn't please everyone. Maryland utility regulators, for example, attacked FERC's recent decision to give incentive rates to Public Service Electric & Gas for its portion of the $1.4 billion Mid-Atlantic Power Pathway. Pepco Holdings already had received incentive adders for its majority portion of the project.
The state Public Service Commission called FERC's decision-making process arbitrary and ad hoc and said it did not adhere to clear criteria and may not result in just and reasonable rates. Pepco's receiving incentive rates for its part of the MAPP project does not mean that PSE&G should receive the same incentives, the PSC said; the company's risks are smaller and different. Commissioner Suedeen Kelly dissented partly from FERC's decision and like the PSC has called for more specific criteria. Before Jon Wellinghoff became chairman this year, he often joined Kelly in dissents from transmission incentive orders, but he has not done so in recent decisions.
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