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Federal Energy Regulatory Commission

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Commissioner Tony Clark Statement
March 21, 2013
Docket Nos. ER13-198-000, ER13-195-000 & ER13-90-000
Item No. E-1

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PJM’s Order No. 1000 Compliance Filings

"There is a good deal in these Order No. 1000 compliance filing orders that I could support. Unfortunately, I find myself today in the position of needing to dissent.

“A primary goal of Order No. 1000 is to speed along the development of needed electric transmission projects in an efficient manner. This is especially true for those projects that are required for matters of reliability. I fear that some of the logistical calls in today’s order are at cross-purposes with that goal.

“One major source of contention involves the nonincumbent transmission developer reforms that were approved in Order No. 1000. In today’s final order, the Commission found that allowing the PJM Interconnection, L.L.C. (PJM) to acknowledge the reality of certain state and local laws in its planning process was a violation of these Order No. 1000 reforms. I disagree.

“Effectively, the Commission asks PJM to ignore the very state and local laws that the Commission itself has acknowledged. As this is the case, PJM will be compelled to approve projects that may have no legal possibility of ever being built. The Commission would allow an “after-the-fact” examination if the selected facility ultimately is not successful. It is not until this autopsy report, that PJM can acknowledge the state and local laws—only then will PJM be allowed to evaluate viable alternative transmission solutions.

“The Commission’s decision puts PJM on a collision course for litigation, as opposed to a pathway towards transmission development. Whether or not the Commission agrees with these state and local laws, requiring regions to make plans that do not factor them in is a waste of time and resources. This is especially troubling when the projects under consideration are reliability projects. Such a convoluted process fails to comport with Order 1000’s main goal of “more efficient and cost-effective regional transmission planning.”

“Beyond the logistical problems with this approach, it raises broader policy questions about where the Commission may be heading in terms of the philosophical underpinnings of Order No. 1000. One of the core stated principles of Order No. 1000 is to ensure regional transmission planners take into consideration the various state and local public policy requirements. Yet the Commission’s decision here seems to be arbitrary and capricious by directing transmission planners to take into consideration only those legal requirements favored by the Commission, such as transmission to meet state renewable portfolio mandates, but not those less favored such as state and local laws that may limit who is and who is not eligible to construct facilities within that state’s borders.

“Such an implication is a slippery slope for a Commission whose authority in these matters stems only from the Federal Power Act.

“As a related matter, these orders also present the first opportunity for me to weigh in on Order No. 1000’s revocation of a transmission provider’s federal right of first refusal. I concur with the assessment of my colleague, Commissioner Moeller, who has previously written about these matters.

“Order No. 1000 did maintain a federal right of first refusal for local projects where the incumbent does not seek to share the costs of those projects, upgrades to existing assets, and projects on existing rights of way. I would have also preserved a federal right of first refusal for projects selected for cost allocation in the Order No. 1000 planning process that are (1) determined by the regional planning coordinator as necessary to satisfy NERC reliability standards and (2) located entirely within the transmission provider’s franchised service territory.

“The Commission should have maintained a federal right of first refusal for the reasons Commissioner Moeller mentioned—reinforcing the Commission’s commitment to reliability and avoiding the need for a blanket penalty waiver in the case that a competitor failed to build a necessary reliability project. Additionally, a federal right of first refusal for reliability projects would have recognized the need for speedy development of these reliability projects and greatly simplified the Order No. 1000 compliance process.

“For these reasons, I respectfully dissent from this order.”