On October 6, the Federal Energy Regulatory Commission (FERC) convened utilities, consumer advocates, state regulators, transmission customers, and other policy experts to discuss transmission rate oversight. The five-panel technical conference focused on planning and costs of investor-owned utilities’ (IOUs) local transmission investments and inter-IOU projects aimed at improving reliability. Electricity Law Initiative Director Ari Peskoe participated in the second panel about local transmission costs.
In a statement filed before the conference, Peskoe shows that over the past few decades FERC has used its expansive authority over utility transmission rates to institute several shortcuts that reduce its direct oversight. The statement outlines five potential reforms: 1) requiring utilities to disclose additional information about their transmission investments; 2) funding third parties through utility rates to monitor transmission planning processes and rate cases; 3) lowering utility returns for low-risk transmission projects; 4) imposing cost-sharing mechanisms that would protect ratepayers from mismanaged utility projects; and 5) reviewing the prudence of utility transmission spending. At the technical conference, Peskoe responded to FERC Commissioners’ questions about these proposals and commented on FERC’s legal authority to regulate utility transmission rates. Following the conference, Peskoe filed evidence filed from another FERC docket that responds to unsupported assertions made by IOU representatives on the panel.
FERC’s technical conference is available to stream here. Comments on issues raised during the conference can be filed in FERC Docket No. AD22-8.