APPA Says FERC Should Avoid Mandating Top Down Transmission Planning Approaches

by Paul Ciampoli
APPA News Director
December 7, 2021

Any proposed rule in a Federal Energy Regulatory Commission (FERC) transmission-related proceeding should avoid mandating “top down” planning approaches, particularly those that identify resources based on speculative long-term assumptions about particular areas that have “potential” for resources to be developed, and/or that are based on long-range planning horizons, the American Public Power Association (APPA) recently argued.

APPA’s reply comments came in an advance notice of proposed rulemaking (ANOPR) proceeding at FERC.  FERC issued the ANOPR in July 2021 to reform its transmission planning, cost allocation, and generator interconnection rules (Docket No. RM21-17).

APPA emphasized in its initial comments that its members’ experiences regarding transmission planning, generator interconnection, and cost allocation have varied by region and by transmission provider, and that diversity of perspectives is evident in the initial comments. 

In the reply comments, the public power trade group said developing actionable transmission plans 10-20 years into the future on a uniform basis creates the risk of missing material changes in available resources, technology and load characteristics, as well as local and state laws imposing locational resource requirements, as commenters explained.

Although some commenters and technical conference panelists downplay the risk of overbuilding the grid or creating stranded transmission investment, the comments adequately substantiate these concerns, particularly as longer planning horizons are proposed, APPA said.

“Moreover, as Dr. David Patton observed at the November 15 Technical Conference, even if transmission does not go wholly unused, it may be economically inefficient from a consumer perspective if the assumptions on which transmission planning is based prove to be inaccurate,” APPA said. Patton serves as an independent market monitor for several regional grid operators.

“APPA recognizes that an overly conservative approach to transmission planning carries its own risks.  But an effective bottom-up planning approach focused on the plans of LSEs [load-serving entities] is not overly conservative; it reflects a sufficiently broad and long-term view of future resources, while limiting transmission based on speculative future generation.” 

LSE resource plans, “moreover, provide a basis for collaboration and input between transmission planners, transmission owners, LSEs, states, and other stakeholders to identify the most efficient and cost-effective transmission facilities to meet the needs driven by LSE resource plans.”

Such collaboration “is likely to result in greater consensus on appropriate transmission facilities and help reduce cost allocation disputes. By focusing on cost-effective transmission solutions that ensure that LSEs can serve their customers reliably and affordably, the transmission planning process is likely to consider the sort of long-term look at anticipated future generation that the Commission discusses in the ANOPR.”

If, contrary to APPA’s recommendations, the Commission facilitates a more speculative, top-down, long-range transmission planning process, it should consider measures that will diminish the risk to transmission customers, the group argued.

The initial comments and November 15 Technical Conference discussion also indicate support for regional flexibility in applying any revised transmission planning rules adopted by the Commission, APPA pointed out.

APPA urged the Commission to take a broader approach to regional flexibility. “Consistent with the path taken in Order No. 1000, the Commission could set more general guidelines about the need to plan for anticipated future generation and let particular planning regions propose compliance plans,” it said.

With respect to costs, APPA urged caution with respect to allocating costs based on ill-defined resilience benefits provided by new or upgraded transmission facilities.

“The Commission should not be prescriptive about how ‘resilience’ should be accounted for in the planning process, or how costs associated with promoting resilience should be allocated,” APPA said.

Regional planning processes that account for anticipated generation and utilize scenario planning as supported by APPA “should be able to identify particular risks or scenarios that stakeholders must guard against from a reliability and resilience perspective, which should also allow for reasonable identification of beneficiaries for purposes of allocating costs.”