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FERC approves policy statement on state efforts to develop transmission facilities

June 22, 2021

by Paul Ciampoli
APPA News Director
June 22, 2021

The Federal Energy Regulatory Commission (FERC) on June 18 approved a policy statement that addresses state efforts to develop transmission facilities through voluntary agreements to plan and pay for those facilities. 

The policy statement, which was approved at the Commission’s monthly open meeting, notes that such voluntary agreements include agreements among: (1) two or more states; (2) one or more states and one or more public utility transmission providers; or (3) two or more public utility transmission providers, FERC staff noted in a presentation.

The policy statement also notes that voluntary agreements can further the Commission’s priority of developing cost-effective and reliable transmission facilities by, for example, providing states with a way to prioritize, plan, and pay for transmission facilities that, for whatever reason, are not being developed pursuant to the regional transmission planning processes required by Order No. 1000.  In Order 1000, which was issued in 2011, FERC reformed its transmission planning and cost allocation requirements.

The policy statement also clarifies that voluntary agreements are not categorically precluded by the Federal Power Act or the Commission’s existing rules and regulations. 

The policy statement provides an example of a recent Commission order accepting a study agreement that initiated a voluntary agreement process in the PJM regional transmission organization.

The statement notes that to the extent that states, public utility transmission providers, or other stakeholders believe that the relevant tariffs impose barriers to state efforts with respect to Voluntary Agreements, the Commission is open to filings to remove or otherwise address those barriers. 

Parties considering the use of such agreements are encouraged to contact Commission staff to discuss potential voluntary agreements, FERC staff noted.

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