On April 21, 2022, the Federal Energy Regulatory Commission (“FERC”) approved a draft proposed rule (the “Proposed Rule”) regarding transmission planning and transmission cost allocation. According to a FERC press release issued that day, “[t]The proposed rule addresses the need for our nation’s energy infrastructure to be more resilient and reliable while delivering cost savings to consumers. The Proposed Rule is part of a larger Advance Notice of Proposed Rulemaking announced in July 2021 (the “Advance Notice”).

The transmission planning aspect of the proposed rule includes timing, identification of needs, assessment of facility benefits and increased transparency. Transmission providers would be required to identify transmission needs based on changes in resource mix and demand through long-term scenarios that meet the requirements set out in the draft rule. They would also be required to assess the benefits of regional transmission facilities to meet identified needs over a minimum period of 20 years from the date of commissioning of the facilities in question. The proposed rule would also mandate the establishment of transparent and non-unduly discriminatory criteria for selecting transmission facilities and further coordination between regional and local transmission planning to identify replacement transmission facilities “of the good size “. Certain technologies such as dynamic line ratings and advanced power flow control devices should also be considered.

The part relating to the regional distribution of transmission costs of the proposed rule emphasizes the participation of the State. Specifically, transmission utility providers would be required to seek agreement from relevant state entities in the given transmission planning region regarding the cost allocation methods that would apply to selected transmission facilities in the regional transportation plan. These providers would then revise their open access transmission tariffs to include these methods. Initial comments on the proposed rule must be filed 75 days after it is published in the Federal Register.

The prior notice had also included a request for comment on interconnect queue reform (among other topics), but the proposed rule did not directly address that topic. Instead, FERC said it would continue to assess the filing and address other possible deficiencies in subsequent proceedings. The need to change the interconnect queue process has recently been a major topic of discussion, including PJM’s proposal announced on April 28, 2022 (“Interconnect Proposal”), to have a transition period two years to work on pending projects submitted before 2021. The interconnection proposal also includes plans to process projects on a first-ready, first-served basis instead of first-come, first-served. PJM would further simplify its cost responsibility analysis of individual projects by combining projects within the same cycle. Projects that would not increase network upgrade needs or require facility studies would also be expedited. PJM expects to file the interconnection proposal with FERC in May.

© 2022 Foley & Lardner LLPNational Law Review, Volume XII, Number 122

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