Docket No. ER22-1955-001

We concur because MISO’s proposal is consistent with the Commission’s approach to exempting projects that constitute “upgrades” from the competitive selection process set forth in Order No. 1000,[1] and because MISO has persuasively argued that requiring competition where only a small portion of a project is new could introduce administrative challenges and delays that may stymie the rapid construction of transmission projects that will bring benefits to consumers.[2] 

Nevertheless, we write to express our concern that existing processes may not adequately protect consumers with regard to the selection and construction of many transmission projects.  This order has the negative consequence of expanding the scope of projects for which the transmission owner has less incentive to reduce cost and maximize benefits to the greatest extent possible. 

In response to the Commission’s Advanced Notice of Proposed Rulemaking on regional transmission planning, cost allocation, and generator interconnection,[3] many commenters including the National Association of Regulatory Utility Commissioners (NARUC), urged the Commission to apply greater scrutiny to the costs of transmission projects.[4]  Specifically, NARUC “recommends that the Commission explore whether there is some limit at which the presumption of prudence no longer applies and ratepayers would benefit from an automatic review of the prudence of an expenditure.”[5]  Other commenters suggested a variety of approaches to limiting project costs, such as enhanced transparency,[6] or utilizing an independent transmission monitor to assist the Commission in implementing appropriate cost caps.[7] 

The need for the Commission to apply scrutiny is particularly acute for projects that are subject neither to competition at the wholesale level, nor to cost review pursuant to state jurisdictional proceedings.  Accordingly, we note that a lack of competition at the regional level for an increased number of projects selected as part of its transmission planning process, coupled with a less than robust level of scrutiny of such projects at the state level, may require greater cost scrutiny of those projects by the Commission. 

The Commission is holding a technical conference on October 6, 2022, to examine cost management of transmission investments.  We hope for robust participation in this conference and urge stakeholders to provide the Commission with detailed information regarding these issues so as to inform any subsequent action the Commission may take.  In particular, we urge commenters to provide a detailed picture of the extent of cost review that currently exists at the state level for different types of transmission projects, including regionally selected projects not subject to competition such as MISO’s “upgrade” projects described in this order, as well as local projects constructed by transmission owners.[8]

For these reasons, we respectfully concur.

[1] See SPP Second Compliance Order, 149 FERC ¶ 61,048, at P 149 (2014).

[2] See Order at P 59.

[3] Building for the Future Through Regional Transmission Planning and Cost Allocation and Generator Interconnection, 176 FERC ¶ 61,024 (2021).

[4] See Motion to Intervene and Comments of the National Association of Regulatory Utility Commissioners, Docket No. RM21-17, at 49-58 (filed Oct. 12, 2021) (hereinafter NARUC ANOPR Initial Comments); see also Comment of the Harvard Electricity Law Initiative, Docket No. RM21-17 (filed Oct. 12, 2021); Comments of Public Interest Organizations, Docket No. RM21-17, at 60-74 (filed Oct. 12, 2021); Comments of the Electricity Consumers Resource Council, Docket No. RM21-17, at 13-14 (filed Oct. 12, 2021) (hereinafter ELCON ANOPR Initial Comments). 

[5] NARUC ANOPR Initial Comments at 51.

[6] Transmission Access Policy Study Group, for example, urges the Commission to “[p]rovide for a more interactive and transparent local planning process, with regional and independent oversight.”  Comments of Transmission Access Policy Study Group, Docket No. RM21-17, at 25 (filed Oct. 12, 2021). 

[7] ELCON ANOPR Initial Comments at 14.

[8] Local projects are referred to differently in the various RTOs, for example, as “Supplemental Projects” in PJM.

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