Transmission

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On November 24, 2015, the Commission accepted and suspended proposed amendments to PJM Interconnection L.L.C.’s (“PJM”) Open Access Transmission Tariff (“OATT”) that allocated cost responsibility for two transmission upgrades: the Bergen-Linden Corridor Project, and the Artificial Island Project. In suspending the proposed amendments, the Commission ordered staff to convene a technical conference on whether the use of the solution-based distribution factor (“DFAX”) cost allocation methodology results in rates that are just and reasonable when applied to transmission enhancements and expansions that address reliability violations that are not related to flow on the planned transmission facility, as approved by the Commission in Schedule 12 of the PJM OATT for assigning the costs of transmission upgrades.

On June 18, 2015, FERC issued an order granting in part and denying in part a complaint, and instituting a 206 proceeding to examine the justness and reasonableness of MISO’s Facilities Construction Agreement (“FCA”), Generator Interconnection Agreement (“GIA”), and Multi-Party Facilities Construction Agreement (“MPFCA”).  FERC determined that MISO’s pro forma FCA and GIA may be unjust, unreasonable, or unduly discriminatory or preferential because they treat customers of an affected system operator and those of a directly-connected transmission owner differently without providing any increased level of service.  The case deals with the means by which transmission owners are compensated for network upgrades associated with generator interconnection requests. 

On February 20, 2015, the Commission conditionally approved PJM Interconnection, L.L.C.’s (“PJM”) proposed modifications to the PJM Operating Agreement (“OA”) and the PJM Open Access Transmission Tariff (“OATT”) to allow for the planning and selection of “Multi-Driver” projects—i.e., transmission enhancements or expansions that address a combination of reliability, market efficiency, and public policy objectives—in the PJM Regional Transmission Expansion Plan (“RTEP”).  Additionally, the Commission approved an associated cost allocation method proposed by the PJM Transmission Owners for the newly adopted process.  Currently, PJM’s process selects projects based on one factor, but does not have a procedure in place for selecting projects based on a combination of factors.

On December 18, 2014, FERC granted a Petition for Declaratory Order filed by the Public Service Company of Colorado (“PSCo”) which requested certain clarifications regarding the application of FERC’s prior approval jurisdiction under section 203 of the Federal Power Act (“FPA”) in the context of the assertion of eminent domain by a political subdivision of a state over the transmission assets of a public utility.  In granting the Petition, FERC clarified that transfers by condemnation, regardless of the fact that they are involuntary, are appropriately within the domain of FERC’s 203 prior approval authority.

On October 16, 2014, the Commission accepted in part Southwest Power Pool’s (“SPP”) proposed revisions to its Open Access Transmission Tariff (“OATT”) in compliance with Order No. 1000, and determined that SPP could consider certain state and local laws and regulations in the early stages of its competitive solicitation process for transmission planning.

On October 16, 2014, FERC issued two separate orders addressing the base return on equity (“ROE”) for (1) the New England transmission owners (“NETOs”) operating in ISO-New England Inc., and (2) certain transmission-owning members of the Midcontinent Independent System Operator, Inc. (“MISO TOs”).  In the NETO order, FERC determined that the base ROE should be set at 10.57 percent.  In the MISO TO order, FERC found that the complaint raises material issues of fact regarding whether the current base ROE of 12.38 percent remains just and reasonable, and therefore set the matter for hearing.

On September 18, 2014, FERC issued an order addressing Order No. 1000 compliance filings, and requests for rehearing regarding prior compliance filings, for the parties within the ColumbiaGrid Transmission Planning region in the Pacific Northwest.  In doing so, FERC clarified the role of public power entities in the regional transmission planning process, explaining that if a public power entity chooses to enroll in a regional transmission planning process, it is bound to the resulting cost allocation determinations.  However, FERC also approved a mechanism whereby a public power entity could refrain from enrolling in the process while still being included in its respective planning process.  Under this framework, if a public power entity is subsequently allocated costs under the regional cost allocation method, it could separately determine whether it would accept those costs based on its statutory authorities.

On July 18, 2014, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) issued a decision denying petitions for review of FERC’s orders related to Regional Transmission Organization (“RTO”) transmission expansion cost allocation for FirstEnergy Service Company (“FirstEnergy”) after it transitioned between two RTOs.  Specifically, the D.C. Circuit affirmed FERC’s rejection of FirstEnergy’s request for relief from the PJM Interconnection L.L.C.’s (“PJM”) annual allocation of transmission expansion plan costs for any project approved before FirstEnergy transitioned to that RTO. 

On September 12, 2013, FERC issued an order (“September 12 Order”) granting in part and denying in part requests for clarification filed by Puget Sound Energy, Inc. (“Puget”) and Powerex Corporation (“Powerex”) of a May 20, 2013 order (“May 20 Order”) accepting for filing certain non-conforming service agreements for conditional firm point-to-point transmission service executed between Puget and Morgan Stanley Capital Group, Inc. (“Morgan Stanley”).