Nescoe

Presentation on Competitive Transmission and Order 1000 Reforms to Platts Conference

Presentation

Dated: May 30, 2019

Posted in: ,

Authored by:

14th Annual Platts Northeast Power & Gas Markets Conference 

May 30, 2019 

Any views expressed should not be construed as representing those of NESCOE or any NESCOE manager

State-Sponsored Request for Proposals (RFPs)—Challenges and Opportunities in the Northeast: Where does Order 1000 Fit In?

Overview

  • Background: Order 1000 and Public Policy Tx
  • New England’s Experience
  • Oppportunities / Challenges
  • 2020 Planning Cycle

Background: Order 1000

  • The Federal Energy Regulatory Commission (FERC) issued Order 1000 on July 21, 2011.
  • Objective: improve Tx planning processes and cost allocation mechanisms and ensure just and reasonable rates.

Has Order 1000 Been Successful?

Panelists described Order 1000 as “either partially a success, generally a failure, cost containment is either important, unnecessary or unneeded, should be flexible or very well-defined.”

Former Commissioner Clark
Competitive Transmission Development Technical Conference
Docket No. AD16-18-000
June 27, 2016

Has Order 1000 Been Successful?

“I’ll just put it to you straight: Everyone seems to agree that Order 1000 is not working as intended. But when it comes to this topic, that’s about the only thing stakeholders can agree on.”

Chairman Chatterjee
NARUC 2019 Winter Policy Summit

Background: Order 1000 / Public Policy Tx Planning

  • Transmission Planning/Public Policies. Public policy requirements must be considered in the transmission planning process.
    • Public Policy Requirements = federal, state, local laws
    • Regional flexibility on design

Background: Order 1000 / Public Policy Planning

  • Cost Allocation. Cost allocation method must be in place to allocate the costs of new transmission facilities.
    • Default cost allocation in ISO-NE: 70% regional/30% states with identified need

New England’s Experience

  • Public Policy Transmission Upgrades (PPTUs)

Identification of policy-driven Tx needs

Evaluation of solutions: Potential RFP

  • Study Process Every Three Years

New England’s Experience

  • January 2017 Planning Cycle

–No RFP Issued

–NESCOE communication to ISO-NE identified no state/federal needs at that time.

      • Each state assessed stakeholder input on laws driving Tx

–ISO-NE identified no local needs.

 

Is the Juice Worth the Squeeze?

  • Opportunities
  • Challenges

Questions about Potential Opportunities

  • Is there a way to leverage ISO-NE Tx planning expertise – in a way that does not turn a state’s public policy execution over to ISO-NE engineers?
  • Would ISO-NE process bring forward increased competition among developers?

–Cost Savings/Project Scale

  • Would an ISO-NE process for Tx development allow state procurements to focus on energy price?
  • Expediency?

–Interconnection Queue: avoids serial study process that generally considers interconnection requests on a “first-come, first-served” basis

 

Questions about Challenges

  • Timing: State activities and PPTU process aren’t synched

–Is it possible to coordinate separate processes for developing/constructing Tx and generation?

  • Core Issue: What about jurisdictional boundaries?
  • Critical to states in all things: cost containment

–Is it possible for tariff mechanisms to discipline costs, address overruns?

  • Cost allocation: What about states’ repeated representation about ensuring consumers in any one state do not fund the public policy requirements mandated by another state’s laws?

2020 Planning Cycle

  • Begins January 15, 2020
  • Study process, if any, > 1 year
  • RFP, if any, provides at least 60 day response
  • Planning Advisory Committee (PAC) process throughout