On March 14, 2010, Chairman Wellinghoff responded to a February 2011 letter from senators Bob Corker (R-Tenn.), Ron Wyden (D-Ore.), and Richard Burr (R-N.C.) (collectively the “senators”) who expressed concern that the forthcoming Final Rule stemming from the rulemaking on Transmission Planning and Cost Allocation (see June 18, 2010 edition of the WER) will make customers who receive little or no benefit from a transmission project pay for a majority of the project. In his letter, Chairman Wellinghoff defended the Commission’s proposal that transmission cost allocation include public policy requirements, and he said that by not prescribing the public policy requirements, the various regions can resolve differences through the stakeholder process. Wellinghoff declined to comment in detail on the beneficiary and cost allocation analysis used in the SPP and MISO orders recently passed on cost allocation since the cases are still pending before the Commisison, but he did reiterate that the full Commission found the packages roughly commensurate with the costs. The letter also addressed the senators’ consternation that FERC is using aspects of the Federal Power Act to push costs on those that benefit, even when the party benefiting is not party to a voluntary agreement to assume such costs. Wellinghoff responded that FERC must address the free rider problem, and the Commission is not limited in the way it develops new cost allocation mechanism. Finally, Wellinghoff explained that the proposed rule does not include requirements for interconnection or coordinated operation of facilities.
A full copy of Wellinghoff’s letter to the senators is available here.