Docket No. ER23-2917-001
I fully support the Commission’s approval of California Independent System Operator Corporation’s (CAISO) proposed Subscriber Participating Transmission Owner (Subscriber PTO) model. As CAISO notes, the Subscriber PTO model “will allow new interconnections across the Western Interconnection, enhancing inter-regional transmission resilience, deliverability, and resource adequacy.”[1]
I write separately to highlight that, while the Commission accepts CAISO’s proposal as consistent with Commission precedent regarding the development, operation, and cost recovery of merchant transmission facilities,[2] it does so because this is how CAISO justified its proposal to be just and reasonable. In reaching this conclusion, the Commission does not hold that any model involving subscribers must necessarily be justified pursuant to the Commission’s merchant transmission policy framework. For example, whether it would be just and reasonable and not unduly discriminatory under the Federal Power Act to provide for a hybrid cost allocation tariff that provides for some facility costs to be allocated to captive customers and other facility costs to be borne by subscribers is outside the scope of this proceeding and nothing in this order should be read to resolve that question. It is possible that, in appropriate circumstances, such a structure may facilitate infrastructure that both lowers costs for consumers and provides critical reliability benefits. I encourage the Commission and stakeholders to explore whether and how hybrid cost allocation approaches may prove to be a useful tool to develop needed transmission.
For these reasons, I respectfully concur.