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Should utilities get first right of first refusal on transmission projects?

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Christopher Neely's picture
Independent Local News Organization

Journalist for nearly a decade with keen interest in local energy policies for cities and national efforts to facilitate a renewable revolution. 

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  • Oct 19, 2021
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When the Federal Energy Regulatory Commission approved Order 1000 in 2011, the right of first refusal on transmission expansion projects was taken from utilities and the projects were then left to the competition of the open market. 

According to some in the industry (utilities and their lobbyists, perhaps?) that rule change has essentially led to a standstill in transmission development over the last decade. With transmission taking a central role in the next decade's ambitions to combat carbon emissions, the FERC is considering a rule change around federal transmission policy. 

In July, the FERC opened the process to reform transmission development rules and opened the question to the public to propose reforms. In an Oct. 13 filing, the Edison Electric Institute said the 2011 rule needs to change if we're going to see transmission projects manifest over the next decade. 

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"This policy has resulted in a near standstill in transmission development for regional projects and a substantial increase in process-related costs," the filing said. "It has also stifled the cooperation and collaboration that has historically existed among transmission owners, as well as regional planning entities. It is also important to note that competitive processes are already used at every stage of transmission development and construction to help ensure that rates are just and reasonable."

How taking transmission projects off the competitive bid process will impact pricing remains a central question. Opening these projects to competition ensures that ratepayers are getting a project that scores well on the low-cost but responsible developer meter. However, some contend that the competition has resulted in fewer projects getting done during a time where we need significant transmission upgrades. 

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