On June 17, FERC took two actions intended to facilitate greater coordination with and between state regulators on electric transmission policy and development.  First, FERC issued an order establishing a Joint Federal-State Task Force on Electric Transmission (Task Force), and soliciting nominations for state commission representation on the Task Force from the National Association of Regulatory Utility Commissioners (NARUC). According to FERC’s order, the Task Force will focus on topics related to efficiently and fairly planning and paying for transmission, including generator interconnection, that provide benefits from a federal and state perspective. If successful, the Task Force could play a critical role in re-designing FERC’s interstate transmission policy to better accommodate the state-policy-driven development of renewable energy generation facilities across the country.

FERC established the Task Force pursuant to Section 209(b) of the Federal Power Act, a rarely-invoked provision that authorizes FERC to confer with state commissions “regarding the relationship between rate structures, costs, accounts, charges, practices, classifications, and regulations of public utilities subject to the jurisdiction” of such state commissions and FERC.  The June 17 order noted that transmission-related issues were ripe for federal-state coordination and cooperation given the respective authority of federal and state regulators and the resulting processes that transmission developers must successfully navigate.

The Task Force will be comprised of all five FERC commissioners as well as representatives from 10 state commissions, who will serve one-year terms, not to exceed three consecutively, in an advisory capacity. FERC requested that NARUC submit nominations to FERC for the 10 state commission representatives (with two representatives originating from each NARUC region) by July 17. After receiving nominations from NARUC, FERC will issue a subsequent order listing members of the Task Force and their respective roles, and fixing the time and place for the first public meeting.

The June 17 order also includes an Issue Statement listing the topics that the Task Force may consider, including: (1) identifying barriers that inhibit planning and development of optimal transmission necessary to achieve federal and state policy goals, as well as potential solutions; (2) exploring opportunities for states to voluntarily coordinate in order to identify, plan, and develop regional transmission solutions; and (3) examining barriers to the efficient and expeditious interconnection of new resources through the FERC-jurisdictional interconnection processes, as well as potential solutions to those barriers. As a result of its work regarding these topics, the Task Force may make recommendations to FERC on potential modifications to its regulations and develop a record to be incorporated into FERC and/or state commission proceedings.

Policy Statement on State Voluntary Agreements

FERC also issued a policy statement regarding potential state efforts to develop transmission facilities through voluntary agreements to plan and pay for those facilities. The policy statement clarifies that voluntary agreements are not categorically precluded by the FPA or the Commission’s existing rules and regulations, including FERC’s Order No. 1000, and encourages interested parties considering the use of such agreements to consult with Commission staff. Specific arrangements noted as permissible by the Commission include agreements between or among: (1) two or more states; (2) one or more states and one or more public utility transmission providers; and (3) two or more public utility transmission providers.

As an example, the policy statement highlights the State Agreement Approach Study Agreement between the New Jersey Board of Public Utilities and PJM Interconnection, L.L.C., approved by FERC on February 16 and discussed in a prior post.  The agreement directs PJM to solicit proposals for possible transmission facilities and to analyze them to determine the more efficient or cost-effective transmission enhancement or expansion to meet New Jersey’s goal of interconnecting and providing for the deliverability of 7,500 MW of offshore wind generation by 2035.

The policy statement provides that to the extent states or transmission providers believe that there are barriers to voluntary agreements in Commission-jurisdictional tariffs or other agreements, FERC encourages them to consider making filings to address those barriers. The policy statement further provides that Commission staff is available to generally consult as states, transmission providers, and other stakeholders consider addressing such barriers.

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Jonathan Wright

Jonathan Wright is a member of the firm’s Energy Industry Group, and counsels industry clients on a diverse range of transactional and regulatory matters. Mr. Wright counsels developers, investors and lenders in the development and financing of energy infrastructure assets, as well as…

Jonathan Wright is a member of the firm’s Energy Industry Group, and counsels industry clients on a diverse range of transactional and regulatory matters. Mr. Wright counsels developers, investors and lenders in the development and financing of energy infrastructure assets, as well as mergers and acquisitions, with a particular focus on renewable generation and battery storage facilities.

Mr. Wright also counsels clients on electric and natural gas matters before the Federal Energy Regulatory Commission, where he previously served as an Attorney-Advisor in the Office of the General Counsel. He specializes in matters involving electric generation interconnection, wholesale electric market design and participation, mergers and acquisitions involving jurisdictional assets, and natural gas pipeline rate proposals.