On November 5, 2009, FERC issued a declaratory order disclaiming jurisdiction over proposed transmission lines that would connect wind generators located in the Texas portion of the Southwest Power Pool (“SPP”) to load in the Electric Reliability Council of Texas (“ERCOT”). 

On October 6, 2008 the Public Utility Commission of Texas (“PUCT”) issued an order that designated five Competitive Renewable Energy Zones (“CREZs”) throughout Texas to connect wind generators to load centers.  Two of the zones are located in the Texas Panhandle, which is part of the SPP grid.  The PUCT also selected companies to build transmission lines from each CREZ to load centers throughout the state.  While the PUCT stated that the proposed CREZ transmission lines from the Texas Panhandle should only connect with the ERCOT transmission grid and not SPP, it nevertheless allowed generators in the Panhandle to interconnect with both the CREZ lines and with transmission lines within SPP as long as they were not simultaneously interconnected with ERCOT. 

The two companies selected by the PUCT to build CREZ lines from the Panhandle as well as wind developers with plans to construct generation projects in the Panhandle asked FERC to disclaim jurisdiction over the proposed CREZ lines and to declare that the ownership, operation and use of those lines would not disturb the jurisdictional status quo.  The Petitioners stated that the CREZ lines will be located entirely within Texas, will interconnect only with the ERCOT grid, and will transmit electric energy generated and consumed entirely within the state.  Accordingly, the Petitioners assert that no energy transmitted over the proposed CREZ lines will be commingled with energy transmitted in interstate commerce. 

FERC agreed that the proposed CREZ lines would not disturb the jurisdictional status quo.  The Commission stated that, with the exception of its jurisdiction pursuant to sections 210, 211 and 212 of the  FPA, its reliability jurisdiction under section 215 of the FAP and its authority under any other FPA provisions that provide for limited jurisdiction over the Petitioners and/or their facilities, it would disclaim jurisdiction over (1) the proposed CREZ lines from SPP to ERCOT; (2) the transmission service over the proposed CREZ lines; and (3) sales of electricity over the CREZ lines.  FERC also declared that ERCOT electric utilities and other market participants that are not currently subject to the Commission’s jurisdiction as “public utilities” under the Federal Power Act (“FPA”) section 201 will not become jurisdictional entities as a result of the interconnection of the transmission lines from SPP to ERCOT.

The Order is available at http://www.ferc.gov/EventCalendar/Files/20091105114238-EL09-66-000.pdf.