Benefits to Consumers Must Drive FERC Proposal Addressing Cost Allocation and Transmission Planning

Jun 24, 2010, 16:16 ET from Coalition for Fair Transmission Policy

Fairness Demands the Beneficiaries of New Transmission Bear the Costs

WASHINGTON, June 24 /PRNewswire-USNewswire/ -- The Coalition for Fair Transmission Policy looks forward to working with the Federal Energy Regulatory Commission as it considers new regulations governing transmission planning and cost allocation. The Coalition is a diverse group of electric utilities organized to help ensure that new transmission and clean energy resources to meet this nation's energy and environmental goals are developed in the most cost-effective way for customers. All of the members of the Coalition support the development of cost-effective transmission, clean generation, renewable power and energy efficiency and are actively involved in their development.

The Commission's Notice of Proposed Rulemaking focuses on the critical issues, such as how to ensure that resource plans and transmission needs of local utilities and other customer-serving entities are properly integrated into broader regional and inter-regional plans, so that these broader plans meet the local and regional needs in a cost-effective manner.

Also significant for the members of this coalition, the Commission is examining how to allocate the costs of new transmission projects in a way that ensures that electric customers do not pay for projects from which they receive no benefits. "It is critically important that the ultimate beneficiaries of this Commission's regulatory effort be consumers, especially in this difficult economic climate," said Sue Sheridan, Coalition President and Chief Counsel. "Consumers can't be asked to bear the burden of additional costs if they receive little or no economic or reliability benefits."

Coalition members are still reviewing the Commission's proposal for consistency with the Coalition's principles. Specifically, with respect to transmission planning, some of the key issues to be examined in the NOPR include:

  • Do the new proposed planning requirements build on existing successful, coordinated, open, and transparent regional processes, and are they inclusive of all stakeholders?
  • Does transmission planning continue to be initiated at the local and regional level based on the needs of the customers who bear the burden and benefits of the decisions driven by the planning processes?
  • Do the proposed requirements ensure cost-effective compliance with NERC reliability standards?
  • Does inter-regional coordination remain a complement to, and not a substitute for, local and regional processes?
  • Are alternative transmission solutions required to be considered as part of the planning process?

With respect to cost allocation, the most critical issues we will be examining in the NOPR include:

  • Do the proposed rules require that the costs of investments needed to meet NERC reliability standards be allocated to the planning area(s) where the investments are required to meet the standards?
  • Are costs for new transmission investments not otherwise required to meet NERC reliability standards allocated to the parties (generation and/or load) in a manner that clearly aligns cost responsibility with cost causation?
  • Is deference provided to consensus regional cost allocation solutions developed through open and collaborative processes?

The Coalition has twelve members including Alliant Energy Corporation, Ameren Corporation, CMS Energy Corporation, Con Edison, Inc., DTE Energy Company, Northeast Utilities, PPL Corporation, Progress Energy Inc., Public Service Enterprise Group, SCANA Corporation, Southern Company and United Illuminating 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 Web site,

SOURCE Coalition for Fair Transmission Policy