On the heels of receiving dozens of submissions in response to the Midwest Independent System Operator, Inc.’s (“MISO”) “MVP” cost allocation filing, (see July 23, 2010 edition of the WER) the Federal Energy Regulatory Commission (“FERC”) this week received well over one hundred submissions in response to its Notice of Proposed Rulemaking (“NOPR”) on transmission planning and cost allocation (see June 18, 2010 edition of the WER). Interestingly, FERC also issued a Notice indicating that reply comments in the NOPR docket would not be due until November 12, 2010, which indicates that agency action on the NOPR is highly unlikely before the end of the year.

Thus, the issue of regional transmission expansion cost allocation has been “teed up” for FERC. How FERC acts in these dockets, ER10-1791 and RM10-23, will likely shape the agency’s policy on this issue for years to come.

The issue of how to allocate the costs (i.e., who pays) for new regional transmission lines (oftentimes planned as long haul facilities) has been brought to the fore by several factors. Most prominently, the desire to access abundant wind and solar resources (oftentimes located remotely from load centers) and the perceived need to update an aging grid have been proffered as underpinning the need for a significant build out of the bulk transmission system. On the other side, many parties who are targeted as loads that would bear the costs oftentimes question the benefits that they will receive from the new lines. Regional politics and economic development priorities have also entered the debate as many states would like to see local renewable resources deployed (and therefore, do not see value in long-haul multi-state lines), even if arguments can be made that those local resources may not be as effective as the more distantly located resources.