On August 31, 2018, the Federal Energy Regulatory Commission (“Commission”) issued an order (“August 31 Order”) in which it denied a complaint (“Complaint”) by the California Public Utilities Commission, Northern California Power Agency, City and County of San Francisco, the State Water Contractors, and the Transmission Agency of Northern California (collectively, “Complainants”) against Pacific Gas and Electric Company (“PG&E”). Complainants alleged that PG&E was in violation of its obligation under Order No. 890 to conduct an open, coordinated, and transparent transmission planning process because, according to Complainants, more than 80 percent of PG&E’s transmission planning is done on an internal basis without opportunity for stakeholder input or review. In Order No. 890, the Commission found, among other things, that in order for a Regional Transmission Organization or Independent System Operator’s transmission planning processes to be open and transparent, transmission customers and stakeholders must be able to participate in each underlying transmission owner’s transmission planning process.
On February 2, 2017, Complainants filed the Complaint against PG&E—a transmission-owning member of the California Independent System Operator Corp.—alleging that PG&E’s transmission owner tariff (“TO Tariff”) violates the transmission planning requirements of Order No. 890. Specifically, Complainants argued that PG&E’s TO Tariff violates Order No. 890 because PG&E’s asset management projects and activities (i.e., projects and activities necessary to maintain a safe, reliable, and compliant grid, based on existing grid topology) go through a self-approval process without stakeholder involvement. Further, Complainants asserted that all capitalized transmission work should qualify under the Order No. 890 transmission planning requirements, which would include PG&E’s self-approved transmission work.
In the August 31 Order, the Commission stated that Complainants failed to meet their burden of proof under section 206 of the Federal Power Act to show that PG&E’s TO Tariff transmission planning provisions are unjust, unreasonable, unduly discriminatory, or preferential because PG&E does not require asset management projects and activities to go through an Order No. 890-compliant transmission planning process. In addition, the Commission disagreed with Complainants that the asset management projects and activities at issue fall under the scope of Order No. 890. The Commission held that Order No. 890 was intended to address concerns regarding undue discrimination in grid expansion and that, to the extent PG&E’s asset management projects and activities do not expand the grid, they are not subject to Order No. 890, regardless of whether they are capitalized in PG&E’s transmission rate base.