On January 6, 2010, the FERC approved a request from American Electric Power Services Corporation (“AEP Services”), the wholly owned subsidiary of American Electric Power Company, Inc. (“AEP”), to transfer transmission assets to Electric Transmission Texas, LLC (“Electric Transmission Texas”) under section 203 of the Federal Power Act (“FPA”). 

AEP Services provides management and professional services to AEP Texas Central Company (“Texas Central”), AEP Texas North Company (“Texas North”), and Electric Transmission Texas, which are transmission and distribution utility companies located entirely within the Electric Reliability Council of Texas (“ERCOT”).  On October 23, 2009, AEP Services submitted an application to FERC, asking the Commission to either disclaim jurisdiction over its proposed transfer of the transmission assets of Texas Central and Texas North to Electric Transmission Texas or approve the transfer under section 203(a) of the FPA without ruling on jurisdiction.  AEP stated that because the transmission facilities are located entirely within ERCOT, the disposition would not affect the asynchronous interconnections between ERCOT and other regions under FERC jurisdiction. 

Golden Spread Electric Cooperative (“Golden Spread”) protested the transaction, arguing that FERC’s predecessor agency, the Federal Power Commission, previously determined that Texas Central’s and Texas North’s predecessors were public utilities under section 201 of the FPA; and therefore, both companies were subject to FERC’s jurisdiction.  Golden Spread contended that by perpetuating the asynchronous operations of ERCOT and the Southwest Power Pool, Inc, wind energy development will be limited and consumer costs will increase as more transmission is built.  Further, Golden Spread claimed that since Texas Central and Texas North are subject to FERC regulations, the Commission cannot approve of the transaction because sections 210-212 of the FPA should not allow FERC to order synchronous interconnections without affecting the basic jurisdictional status of non-jurisdictional entities in ERCOT.  Finally, Golden Spread believed the matter should have been set for a hearing to determine if the transaction is truly in the public interest.

FERC determined the transaction met the requirements of FPA section 203, allowing the Commission to avoid the ERCOT jurisdictional issues.  FERC ruled that the transaction was consistent with the public interest, and would not result in cross-subsidization of a non-utility associate company or the pledge or encumbrance of utility assets for the benefit of an associate company. 

 The full opinion is available at www.ferc.gov under dockets EC10-8 and EC10-10.