Transmission won’t get built without state buy-in, according to Mark Christie, a Federal Energy Regulatory Commission commissioner.
And states shouldn’t have to pay for power lines that are built to satisfy the energy policies of other states, Christie said Thursday during a meeting in Chicago hosted by WIRES, a transmission-focused trade group.
Christie’s comments come as FERC is preparing to revise its requirements for regional transmission planning and cost allocation, with a decision coming as soon as the agency’s April 25 open meeting.
“If you want to get those regional lines built, you have got to have state buy-in,” Christie said. “You cannot cut states out of the process.”
State regulators should be included in the transmission process, particularly on the question of who pays for it, according to Christie.
“If you tell states, ‘You pay whether you like it or not’ — and that’s what a lot of lobbyists are pushing us to do — it ain’t going to work,” Christie said. It will lead to years of litigation, delaying transmission construction, he said.
Further, FERC’s backstop authority to approve transmission lines in national interest corridors will last until the agency uses it, according to Christie. “The political blowback is going to be off the charts,” he said.
FERC also lacks the authority to order that power plants or transmission lines be built, Christie noted.
“So let's not look to FERC as the big sugar daddy in Washington that is going to get all this stuff done,” Christie said. “Ultimately, assets get built at the state level because states have the authority to order the construction of generating units, which we need a lot more of, especially combined cycle units, and transmission assets.”
Looking back, the premise of FERC’s Order 1000 — which aimed to spark regional transmission development, partly through competition — was wrong because it failed to include states in transmission planning in a systematic way, Christie said.
Christie reiterated his concerns about formula rates, an annual process that allows transmission owners to update their transmission rates outside a typical rate case. FERC gives transmission owners the presumption their spending was prudent, leaving it up to ratepayer advocates and others to show it wasn’t, according to Christie.
“I’ve got a big problem with that,” Christie said, noting that in all other situations in utility law, the onus is on utilities and transmission owners to show their spending was prudent.
It’s also too difficult to challenge FERC formula rates, according to Christie. “There isn’t any realistic challenge process,” he said.
