Last month, the DC Circuit Court of Appeals unanimously ruled to uphold the Federal Energy Regulatory Commission’s (FERC) Order 1000, which establishes rules for planning and sharing the costs of interstate electric transmission lines needed to connect large renewable resources in remote areas with consumers and businesses, and to make the grid more efficient and reliable.
At root, the case focused on three key provisions of Order 1000 that were challenged by petitioners:
- Mandatory regional transmission planning linked to cost allocation and inter-regional coordination in all regions of the country;
- Requiring transmission planners to consider relevant “public policies” – i.e. power plant emissions standards, state and federal climate change policies, and renewable portfolio standards – in deciding which lines to build; and
- The removal of the “right of first refusal,” which has previously given incumbent transmission owners priority in developing new projects.
The court agreed with FERC that all of these policies would benefit consumers by making transmission investments less duplicative, faster, and more competitive. Better planning, in turn, will make the grid more efficient, reliable and resilient, and will accelerate the development of abundant and affordable clean and renewable energy resources around the country.
The country’s transmission infrastructure has been sorely neglected, and the American Society of Civil Engineers estimated a $37 billion investment gap by 2020 based on current transmission plans. The interstate and interregional lines targeted by FERC in Order 1000 are most significant for the coming transition from a fossil-fuel powered electric generation fleet to one where renewable resources dominate. A robust transmission network is the key to unlocking diverse and abundant renewable resources like wind and solar and integrating them across large geographical regions to deliver reliable, affordable, and sustainable electricity to customers in every part of the country.
Order 1000’s public policy provision is key to both meeting state renewable portfolio standards, and to the pursuit of the Obama Administration’s Climate Action Plan goals. Greater grid access to renewable resources means not only more affordable, zero-marginal cost electricity, but also avoided emissions from fossil-fired generation. In light of the US EPA’s Clean Power Plan rulemaking, states, grid operators, and transmission developers should welcome the public policy provision in making their emissions reductions targets more attainable.
The court also affirmed FERC’s decision to eliminate federal “rights of first refusal” for incumbent transmission owners. Under the new rule, incumbent transmission owners will no longer have the power to stop transmission lines which might bring cheaper cleaner generation into their service territories. Independent transmission companies who commit resources to developing proposals will not have to worry about having their projects excluded from consideration, stalled indefinitely, or built by the incumbent. The more open and competitive environment established by Order 1000 will foster the development of more creative and efficient transmission solutions.
Although it is a complex piece of regulation, Order 1000 is a benefit to consumers, the climate, and the US electricity system. Americans for a Clean Energy Grid applauds the Circuit Court decision, and supports Order 1000 as a key component of moving towards a clean, affordable energy future.