Stresses Potential Precedent of IPL Rate Case on FERC's Cost Allocation Policy
WASHINGTON, Nov. 5, 2012 /PRNewswire-USNewswire/ -- Coalition for Fair Transmission Policy President and Chief Counsel Sue Sheridan addressed concerns about electric transmission regulations and the prospects for Congress to act on energy issues in 2013 during a recent interview on Focus Washington, a leading webcast specializing in public policy and commentary.
Sheridan reiterated the coalition's concerns about the Federal Energy Regulatory Commission's Order 1000, a massive rulemaking that could completely restructure the nation's electricity grid. The coalition has repeatedly challenged parts of FERC Order 1000, most recently in a federal appeals court filing.
"First, the order has the potential to upset bottom-up transmission planning, which has always been the role of utilities working with their state regulators and has worked well. Second, the order would allow cost allocation for new transmission lines that isn't fair, that doesn't meet the just and reasonable standard of the Federal Power Act, and doesn't match up with the benefits and the costs to transmission customers," Sheridan said.
Regional transmission organizations and utilities have started filing compliance plans with FERC. However, FERC also could reveal its position on cost allocation in a complaint filed by Interstate Power and Light Co. "IPL complained that it was being charged four times as much as it should be for transmission upgrades and that the costs were not roughly commensurate with the benefits received," Sheridan said.
In its filing, IPL told FERC that cost-allocation policies approved by the Midwest Transmission System Operator (MISO) are "unjust and unreasonable" because they forced consumers to pay $32 million for system-upgrade costs that provide them with virtually no benefits. Over the next four years, IPL said, it will be unfairly assessed another $138 million if FERC does not act. "The burden of these huge costs is unrelated to any benefits that may accrue to IPL and its customers from the energy produced by the interconnecting generators or from the network upgrades constructed to support new generation, which benefits have been, in IPL's experience to date, negligible," IPL said.
Asked about the elections, Sheridan emphasized the bipartisan support the coalition has received on Capitol Hill. Senate Energy and Natural Resources Committee Chairman Jeff Bingaman, D-NM, is retiring, she noted, but the prospective leaders of the committee, Lisa Murkowski, R-AK, or Ron Wyden, D-OR, are co-sponsors of bipartisan legislation that would benefit consumers by rectifying many of the coalition's problems with Order 1000. "We also have allies in the House, so we can work with whichever party is in control," Sheridan said.
Energy, including transmission policy, could emerge as major issues in Congress in 2013. "There hasn't been an energy bill of any magnitude since 2007. There are a number of issues that have arisen. Transmission is certainly one of them. We know there is interest among House members and senators. So we hope that there will be some oversight hearings and even legislation if we still are finding we have the same problems with FERC after the commission addresses the compliance filings," Sheridan said.
About the Coalition
The Coalition members include CMS Energy Corporation, DTE Energy Company, Duke 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. For more information, visit the Coalition's website: www.fairtransmission.org.
SOURCE Coalition for Fair Transmission Policy