On Wednesday, members of the Senate Energy and Natural Resources Committee (“Energy Committee”) discussed Chairman Senator Jeff Bingaman’s (D-NM) revised “discussion draft” transmission siting legislation. Previously, Senator Bingaman released draft legislation on March 10, 2009 (see March 13, 2009 edition of the WER). While members of the Energy Committee discussed the discussion draft yesterday afternoon, they did not vote on the proposed legislation.
The discussion draft contains several key changes from the prior draft that seem to increase the Federal Energy Regulatory Commission’s (“FERC” or “Commission”) role and authority on new transmission planning. Most significantly, the discussion draft eliminates the prior requirement to designate one or more regional planning entities to prepare transmission project plans as part of the “national interstate transmission system.” Instead, the Commission itself will prepare the plans and “may” defer to an interconnection-wide planning authority that has developed a plan if the Commission chooses to do so.
While the Commission will prepare transmission project plans, the states will have primary siting authority under Senator Bingaman’s discussion draft. However, the Commission will have “backstop authority” in three different instances for high-priority national transmission projects: (1) if a state fails to approve the project within one year after the developer submits an application; (2) if the state rejects the project; and (3) if the state places conditions on its authorization of the project so that it unreasonably interferes with the project’s development or contrary to the purposes of the discussion draft.
Another significant change between the two drafts relates to the cost allocation for high-priority national transmission projects. In Senator Bingaman’s first draft of the legislation, regional planning entities would propose a cost allocation plan to be approved by the Commission. In the discussion draft legislation, the Commission itself must establish by rule an appropriate methodology to allocate costs. Both drafts require rates affected by cost allocation to be just, reasonable, and not unduly discriminatory or preferential.
Senator Bingaman decided to have a discussion with members of the Energy Committee in order to listen to any suggestions and perhaps make changes to the discussion draft before it heads to markup, which is scheduled for Wednesday, May 6. Most of the comments made yesterday expressed some concern about vague language related to cost allocation, beneficiaries, and what actions the Commission could take to address obstacles to investing, siting, and constructing high-priority national transmission projects.
The current discussion draft and its summary can be found at: http://energy.senate.gov/public/index.cfm?FuseAction=IssueItems.View&IssueItem_ID=6a7e4b50-e86d-452b-b0eb-630b2c7c10d1.