News Release: May 15, 2014
FERC Allows References to State, Local Laws in Transmission Tariffs
The Federal Energy Regulatory Commission (FERC) today granted rehearing in three separate orders regarding consideration of state laws and regulations and rights of way when designating a transmission developer to build a transmission project selected in the regional transmission plan for purposes of cost allocation.
FERC previously ordered the provisions, such as state laws allowing for right of first refusal (ROFR), be removed from Commission-jurisdictional tariffs and agreements. But after further consideration FERC concluded that ignoring these state laws at the outset of the regional transmission planning process could cause inefficiencies and delay new transmission projects.
One goal of Order No. 1000 is to facilitate the likelihood that needed transmission facilities can move forward. FERC continues to require elimination of federal ROFRs for incumbent transmission providers from Commission-jurisdictional tariffs or agreements for transmission facilities selected in a regional transmission plan for purposes of cost allocation because they create a barrier to entry.
However, Order No. 1000 does not affect state or local laws or regulations with respect to siting, permitting or construction of transmission facilities, regardless of whether they are expressly stated in tariff provisions. Parties argued in petitions seeking rehearing of Order No. 1000 compliance orders for Midcontinent Independent System Operator (MISO), PJM Interconnection (PJM) and South Carolina Electric & Gas Co. (SCE&G), that the tariff provisions merely acknowledge state or local laws and do not create a federal ROFR.
FERC agreed that prohibiting these tariff provisions could result in a regional transmission planning process that fails to efficiently account for state or local laws that affect the siting, permitting and construction of transmission facilities. Further, the Commission said regions would have to spend time and resources to evaluate potential transmission developers for transmission projects that ultimately must be assigned to the incumbent developer.
The orders also accepted the second round compliance filings by MISO, PJM and SCE&G, finding the regions have made further progress but must make additional modifications.
Finally, FERC accepted Maine Public Service Co.ís second compliance filing and granted waiver of the interregional transmission coordination and cost allocation requirement. The order also denied Northern Maine Independent System Administrator Inc.ís request for rehearing of the first compliance order.