November 18, 2021
It’s November, when we celebrate National Native American Heritage Month, honor our nation’s veterans, and here at FERC, congratulate the newest member of our Commission, Willie Phillips. I wish Chairman Phillips the best and look forward to helping him get up to speed upon his arrival.
I want to thank staff of both FERC and NERC for their hard work in pulling together this report. I urge everyone to read the report’s important, detailed and informative narrative and recommendations. I share the Chairman’s commitment to addressing as many of these recommendations as is possible and I am anxious to engage with NERC on implementation.
What is important in the Spire proceeding today is that we take the issues on the record seriously. I am committed to ensuring we stay on track to act on Spire’s application for a temporary certificate in a timely fashion.
There’s been a lot of talk about transmission over the last week. As the focus has been on the planning portion of a broader set of potential reforms, I want to speak to a couple of the planning themes I’ve been hearing and thinking about related to this issue, as many of you shore up reply comments in the Advanced Notice of Proposed Rulemaking docket.
First, Transmission investment is critical to resilience and reliability. I heard several state colleagues at the NARUC task force and during Monday’s technical conference express some version of “reliability is job #1.” I absolutely agree. Reliability and resilience-focused transmission investment should be a critical priority, given the unprecedented threats our system is facing and the potential for transmission to help strengthen the grid against those threats. I understand that quantifying the resilience benefits of transmission investment would be a new approach and it is one of several ways to ensure effective resilience planning—I think it’s a challenge we must engage on because planning that fails to account for foreseeable future conditions and fails to recognize these system benefits cannot succeed in putting reliability first.
On reply, I hope that commenters will engage specifically with concepts like resilience benefits, interregional transfer capability, and other ideas for facilitating reliability and resilience planning more broadly.
Second, smart transmission investment can save customers money by lowering the delivered cost of energy. Rhetoric around transmission investment often suggests a binary choice between investment based on forward-looking planning and investment based on cost-consciousness. I believe that is a false choice. Across the country, customers already invest billions of dollars in transmission infrastructure annually. Regardless of Commission action, transmission planners around the country will continue to identify new system needs. Transmission owners will continue to seek out investment opportunities based on their financial incentives. The Commission’s responsibility is to align those financial incentives with investment that will meet future demand cost-effectively.
There seems to be a broadly shared stakeholder perspective that probabilistic scenario planning, with as accurate and current inputs as possible, is the key to successfully balancing future needs and any related uncertainty.
The rhetoric also often suggests that another dollar spent on transmission is another dollar added to customers’ bills. But what customers care about is the bottom line, their full delivered cost of power. The goal should be to build the system that is most likely to result in the least total costs for customers. If transmission unlocks access to low-cost resources, enhances competition, and mitigates the costs of extreme weather events, it will be a net win for consumers.
That said, appreciating the magnitude of the system investment under consideration, I am also interested in additional input on appropriate measures that protect against unnecessary costs throughout the planning process.
For example, is there more input on how can we ensure transmission planners effectively consider grid enhancing technologies? How can the planning process incorporate opportunities for non-wires alternatives and demand-side resources to alleviate system needs at lower cost than new wires investment, especially at the local level?
Also, as I have said before, I believe the planning process must include adequate oversight – both in the selection of needed projects, and to ensure the cost of building those projects remains reasonable. The ANOPR posed broad questions on oversight. I hope that on reply stakeholders will engage with recommendations provided in the initial comments about the best tools to ensure customer protection, not only in the development of regionally-planned multi-value projects, as well as reliability projects, reconstruction of aging infrastructure, and local projects.
I appreciate the time and input stakeholders have committed to this record. I look forward to the reply comments due at the end of this month.