On August 26, 2016, FERC established a proceeding to determine whether transmission owners in the footprint of the PJM Interconnection L.L.C. (“PJM”) are complying with the requirements of Order No. 890. This proceeding follows a November 2015 technical conference in which several PJM transmission customers and other parties suggested that PJM stakeholders are unable to meaningfully participate in the transmission planning process for certain PJM projects, in contravention of Order No. 890’s planning requirements.

In 2007, FERC reformed the pro forma Open Access Transmission Tariff (“OATT”) through Order No. 890. Among other requirements, Order No. 890 established nine transmission planning principles, the first of which was for transmission providers to give customers and other stakeholders a “meaningful opportunity to engage in planning along with their transmission providers,” as opposed to facilitating “a mere exchange of information” and “after the fact” review. Attendant to this “cooperation” obligation was the duty of transmission providers to disclose the basic criteria, assumptions, methodologies and data supporting their transmission plans so that stakeholders could provide timely input on a project’s merits.

At the Order No. 890 compliance stage, FERC rejected several initial filings by PJM out of concern that they did not sufficiently address how locally planned projects would fit into the larger regional transmission planning process or how stakeholders could review and comment on those projects before they were finalized. PJM ultimately revised sections of its Operating Agreement to allow for earlier opportunities to provide input and to establish a sub-regional review committee to address stakeholder concerns. FERC relied on these revisions as the basis for both its ultimate approval of PJM’s Order No. 890 compliance filing as well as of PJM’s compliance filing for Order No. 1000—another order addressing transmission planning issues, which FERC issued in 2011.

According to comments from customers and stakeholders during and following the November 12, 2015 technical conference, however, it appeared that some PJM transmission owners were identifying, and even beginning to develop, certain projects before the stakeholder participation stage. Although some regional transmission owners were providing early and meaningful opportunities for stakeholder participation, FERC expressed a concern that this was not a common regional practice.

Acting on its own authority under section 206 of the Federal Power Act, FERC opened this proceeding to determine whether PJM transmission owners are meeting their Order No. 890 obligations. FERC required that, within 60 days from the date of the order, PJM transmission owners must either “(1) propose revisions to the PJM Operating Agreement to comply with Order No. 890, (2) revise their portions of the PJM OATT or revise their individual OATTs to comply with Order No. 890, or (3) show cause why they should not be required to do so.”

A copy of the Order can be found here.