Dive Brief:
- A federal appeals court has struck down claims that FERC Order 1000 goes too far in requiring transmission owners to take part in regional planning.
- The court's decision was a vindication for federal regulators, calling claims that the Federal Power Act did not authorize the Federal Energy Regulatory Commission (FERC) to develop cost allocation provisions "unpersuasive."
- FERC Chair Cheryl LaFleur issued a statement saying she was "very pleased" with the decision and called Order 1000 "critical" to the transmission built-out that is needed "to adapt to changes in [the United States'] resource mix and environmental policies."
Dive Insight:
The three judges completely rejected challenges to Order 1000, which FERC issued in 2011 and is designed to take a more holistic look at transmission planning and cost-allocation. The ruling preserves FERC's central contention that transmission providers must take part in regional planning.
According to the challengers, Section 206 of the Federal Power Act does not authorize FERC to require utilities to pay for the costs of transmission facilities developed by entities with whom they have no prior contractual or customer relationship and from whom they do not take transmission service.
The court disagreed, finding "no such limitation exists in the statutory text. Section 206 empowers the Commission to fix any 'practice' affecting rates, and the Commission reasonably understood beneficiary-based cost allocation — or its absence — to be a practice affecting rates."
