FERC’s Order 1000, “State Policy” & Self-Reliance

Keryn has a good post today over at StopPATH WV about the controversy swirling around FERC’s Order 1000.  The controversy is about whether rate payers in other states should be forced to pay for transmission lines that only serve to meet one state’s renewable portfolio standard.  It doesn’t take much thought to figure out that this plan is wrong and unfair on its face.

The PJM cartel is pursuing an intelligent policy in this discussion.  PJM is insisting that if a state wants to use out of state renewable power to meet its own RPS goals, then that state’s rate payers should pay for the transmission improvements to bring in that power.  The organization of PJM state regulators agrees with PJM’s position.

This discussion has come up in FERC’s implementation plans for its Order 1000, because one of the main purposes of Order 1000 is to coordinate flows of power across the boundaries of regional transmission operators.  Land based wind developers in the Midwest want to be able to send their power all the way to NJ and MA, even though both those states have enough offshore wind potential and solar potential to meet all of their own RPS requirements for decades to come.  This long distance transmission development, might  involve billions of dollars of investment in new lines extending across as many as three RTOs, the Southwest Power Pool, MISO and PJM.  This investment is so massive that no individual state would be able to bear the cost burden to meet its RPS targets.  So the land based wind industry wants all rate payers in these RTOs to be forced to pay for these new lines in the same way AEP/FE wanted Project Mountaineer to bail out their obsolete coal burners.

So far, it looks like PJM, state regulators and even FERC are resisting the land based wind industry’s push for “state policy drivers” for new interstate transmission line rate recovery.  Good for them.

Encouraging more distant sources of power also reduces the overall reliability of our national transmission/distribution grid.  To improve reliability, we need new generation closer to where power is used.  Seen in this light, it makes no sense to produce power in Iowa to send to NJ, whether that power is produced by coal burners or wind turbines.  The absurdity is magnified when you consider the huge potential NJ has to produce its own wind power from within its own territorial waters.

FERC Chairman Wellinghoff has recently advocated for a more decentralized national grid.  He needs to stand firm and prevent Order 1000 from undermining his wise position.  FERC should be supporting state self-reliance, not creating tools for its destruction.

One thought on “FERC’s Order 1000, “State Policy” & Self-Reliance

  1. Oh, what a silly game he plays! Wellinghoff knows better, but still he hitches a ride on the “we need new transmission to unlock location constrained renewables” bus. So, the question remains… does he do it because he’s in the company of unenlightened individuals and is forced to go along, or because he knows this charlie foxtrot over regional cost allocation of public policy projects is going to tie new transmission up long enough for distributed generation to really take off? We’ve learned very well over the past 5 years that delay obviates just about any plan that’s thought up by industry, if it goes on long enough. This is definitely a Byzantine moment — sit back and watch you enemies fight each other and collect your prize after the dust settles.

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