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Commission Approves PJM’s Proposal to Include Public Policy Considerations in its Transmission Planning Process

On April 30, 2012, the Federal Energy Regulatory Commission approved revisions to the PJM Interconnection, L.L.C.’s (“PJM”) transmission planning process in Docket No. ER12-1179-000.  PJM submitted the proposed revisions in order to expand its planning analyses beyond reliability and market efficiency considerations, developing a more extensive analysis that includes renewable resource integration, demand response programs, environmental initiatives and “at risk” generation.  PJM specifically sought inclusion of two new definitions: 1) “Public Policy Requirements” which addresses the types of public policy initiatives that PJM will consider when consolidating the system’s transmission needs into a single regional transmission expansion plan; and (2) “Public Policy Objectives,” which is a broader use of public policy that, according to PJM’s filing, “would allow PJM, in consultation with its stakeholders, the flexibility to consider a wider range of public policy objectives beyond enacted statutes or promulgated regulations that may have potential impacts on long term planning.”

The Commission found PJM’s revisions to be reasonable, and specifically found that PJM is not prohibited by the Federal Power Act from considering Public Policy Requirements or Public Policy Objectives in its planning process as defined by PJM in its proposal.  The Commission also clarified that although some entities had expressed concern with regard to the scope of PJM’s definition of Public Policy Objectives, the term was limited to those initiatives that may have important impacts on long term planning considerations, and specifically allow for stakeholder input in determining which initiatives should properly be considered in the planning process.  The Commission did agree with certain protesters that PJM’s proposed revisions lack sufficient detail, and directed PJM to submit a compliance filing of tariff revisions clarifying how sensitivity studies, modelling assumption variations, and scenario planning analyses will be employed within the regional transmission expansion plan process.

To view the Commission’s Order, click here.