On October 17, 2019, FERC issued an order establishing an investigation under Federal Power Act Section 206 into whether ISO New England Inc. (“ISO-NE”), PJM Interconnection, L.L.C. (“PJM”), and Southwest Power Pool, Inc. (“SPP”) (collectively, “Responding RTOs”) may be inconsistently or more expansively implementing Order No. 1000’s immediate need reliability project exemption, which allows Responding RTOs to establish immediate need reliability projects exempt from Order No. 1000’s regional transmission planning competition requirements. In the order, FERC established proceedings related to its concern, and directed the Responding RTOs to provide responses to certain questions regarding the implementation of the exemption.
In 2011, FERC issued Order No. 1000, which, in part, required transmission providers to eliminate provisions from their tariffs and agreements that grant incumbent transmission owners a federal right of first refusal (“ROFR”) to construct transmission facilities selected in a regional transmission plan for purposes of cost allocation. In response to compliance proposals from the Responding RTOs, FERC permitted an exemption where a limited ROFR may be retained for certain transmission facilities that are needed to resolve a time-sensitive reliability criteria violation. To ensure that the exemption is used only in limited circumstances, FERC established a five-criteria test to determine whether the proposed transmission facilities qualify for the exemption, i.e., when the project is needed by, why the project is needed, and requiring the posting of information related to the project.
In its order, FERC stated that after its review of the annual informational filings and material provided on the websites of the Responding RTOs, it was concerned that the Responding RTOs may be inconsistently or more expansively implementing the exemption, and that such implementation by the Responding RTOs may be unjust and unreasonable, unduly preferential and discriminatory. Among its concerns, FERC referenced (i) how certain of the projects have “need-by dates” that are prior to the year that the Responding RTO designated such projects as immediate need transmission projects, (ii) that some projects listed as immediate need reliability projects have not gone into service by their need-by dates, and (iii) that certain required posting information is difficult or impossible to find on the some of the Responding RTOs’ websites.
FERC’s order initiated proceedings directing the Responding RTOs to provide responses to a series of questions, which are divided into three categories. FERC requested that the Responding RTOs (i) show how they are meeting the five-criteria test for immediate need reliability projects, (ii) demonstrate that their implementation of the immediate need reliability project exemption is just and reasonable, and (iii) consider and respond to potential conditions or restrictions that FERC may impose on the Responding RTOs related to the immediate need reliability project exemption. Each Responding RTO is required to submit its response no later than 60 days after the publication of notice in the Federal Register of FERC’s initiation of these proceedings. Parties may file comments in response to the Responding RTOs within thirty days after the due date of the Responding RTO’s response.
A copy of the order is available here.