Order 1000 and Recent FERC Rulings: What s Next for NW Publics?

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1 Order 1000 and Recent FERC Rulings: What s Next for NW Publics? MALCOLM C. MCLELLAN Partner, Seattle July 16, 2013 Annual Mid-C Seminar

2 Outline FERC s Regional Compliance Filing Orders WestConnect and ColumbiaGrid What does it mean for public power? How does public power participate? Where do we go from here? 2 Annual Mid-C Seminar July 16, 2013

3 FERC s Recent Orders WestConnect Paragraphs : [T]o fully comply with the cost allocation requirements of Order No. 1000, cost allocation determinations for transmission projects selected in the regional transmission plan for purposes of cost allocation must be binding upon identified beneficiaries and... certain aspects of the proposed cost allocation method must be explained in the OATT in greater detail to provide adequate transparency. A regional cost allocation method that is not binding on identified beneficiaries does not comply with the principle that costs must be allocated in a manner that is roughly commensurate with estimated benefits. ColumbiaGrid Paragraphs : Binding cost allocation language similar to that contained in WestConnect order FERC also rejected BPA s proposed tariff revisions that included a non-binding cost allocation methodology [W]e find that a transmission provider enrolled in a transmission planning region, regardless of whether it is a public utility or non-public utility, must be subject to the region s cost allocation method and thus subject to determinations made under that method. 3 Annual Mid-C Seminar July 16, 2013

4 Effect on Public Power If a non-public utility transmission provider chooses to enroll, cost allocation decisions, if any, become binding ColumbiaGrid Order at P 274: Order No requires that cost allocation determinations under the regional cost allocation method be binding, and that nonpublic utility transmission providers that made the choice to join a transmission planning region would be responsible for costs associated with benefits if they are determined by the transmission planning process to be beneficiaries of certain transmission facilities selected in the regional plan for purposes of cost allocation. FERC appears to be using the enrollment process as the jurisdictional hook to impose binding cost allocation 4 Annual Mid-C Seminar July 16, 2013

5 How can public power participate? Participate as a stakeholder and choose not to enroll in the planning or cost allocation processes ColumbiaGrid Order at P 112: Stakeholders must be provided an opportunity to provide input during the evaluation of potential solutions to identified needs. In addition, the Commission and stakeholders must be able to review the record that is created by the process to help ensure that the identification and evaluation decisions are open and fair, and not unduly discriminatory or preferential. Also, P 27: Order No A states that public utility transmission providers in each transmission planning region must have a clear enrollment process that defines how entities, including non-public utility transmission providers, make the choice to become part of the transmission planning region. Also, P 37: While the Commission clarified in Order No A that Order No does not require any non-public utility transmission provider to enroll or otherwise participate in a regional transmission planning process 5 Annual Mid-C Seminar July 16, 2013

6 How can public power participate (con. t)? Transmission providers enroll only if the regional planning entity has an expedited withdrawal process for nonjurisdictional entities that receive binding cost allocations ColumbiaGrid at P 270: [T]o accommodate the participation by non-public utility transmission providers, the relevant tariffs or agreements governing the regional transmission planning process could establish accelerated withdrawal for nonpublic utility transmission providers that are unable to accept the allocation of costs. Also, P 273: [T]he Commission clarified that non-public utility transmission providers have the option of whether or not to enroll in a regional transmission planning process, a voice in determining the regional cost allocation method, an ability to challenge any individual cost allocation by filing a FPA section 206 complaint with the Commission, and an ability to withdraw from the regional transmission planning process if that non-public utility transmission provider was unable to accept the allocation of costs pursuant to a regional cost allocation method. 6 Annual Mid-C Seminar July 16, 2013

7 Where do we go from here? Transmission providers A reciprocity tariff requires an Attachment K ColumbiaGrid at n.18 In this order, we only address whether Bonneville Power s revised transmission planning process meets the safe harbor reciprocity requirements for transmission planning. Non-transmission providers 7 Annual Mid-C Seminar July 16, 2013

8 For More Information: MALCOLM C. MCLELLAN Second Avenue Suite 1150 Seattle, WA July 16, 2013 Annual Mid-C Seminar