On January 10, 2011, the five current Commissioners at the Federal Energy Regulatory Commission (“FERC” or the “Commission”) sent a joint letter (the “January 10th Letter”) to the Wall Street Journal (the “Journal”) in response to a December 30, 2010 editorial called “The Midwest Wind Surtax” (the “December 30th Editorial”). The December 30th Editorial is the second editorial piece published by the Journal in connection with the Commission’s decisions regarding transmission planning and cost allocation issues.  The first was published on November 7, 2010, entitled “The Great Transmission Heist” (see December 3, 2010 edition of the WER).

The Journal’s December 30th Editorial was critical of FERC’s December 16, 2010 Order regarding the cost allocation plan by the Midwest Independent System Operator (see December 17, 2010 edition of the WER).  The Journal’s piece argued that the cost-allocation plan approved by FERC is a “discriminatory subsidy” for wind energy and also argues that this is the “first step” towards socializing transmission costs.

In their January 10th Letter, the Commissioners argued that the December 30th Editorial “mischaracterizes” the actions of FERC and argued that investment in transmission “promotes efficient and competitive electricity markets,” which will “hold down prices for consumers.”  The Commissioners also pointed out that their June 2010 Proposed Rule provides that those who receive no benefits from transmission facilities would not be required to pay.  The Commissioners also stated that regions have flexibility to allocate cost of new transmission investment, and that the Midwest’s proposal was the result of “months of negotiations among diverse stakeholders.”  The Commissioners concluded their letter to the Journal by stating that FERC has sought to facilitate competitive wholesale electricity markets to benefit consumers.

A copy of the joint letter is available here.