PJM Interconnection, L.L.C., 032213 FERC, ER13-198-000

Docket Nº:ER13-198-000, ER13-195-000, ER13-90-000
Party Name:PJM Interconnection, L.L.C. Indicated PJM Transmission Owners PJM Interconnection, L.L.C Public Service Electric and Gas Company PJM October 25 Filing Docket No. ER13-198-000
Judge Panel:Before Commissioners: Jon Wellinghoff, Chairman; Philip D. Moeller, John R. Norris, Cheryl A. LaFleur, and Tony Clark. Commissioners Moeller and Clark are dissenting with separate statements attached. Nathaniel J. Davis, Sr., Deputy Secretary. Philip D. Moeller, Commissioner, dissenting: Tony Cla...
Case Date:March 22, 2013
Court:Federal Energy Regulatory Commission
 
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142 FERC ¶ 61, 214

PJM Interconnection, L.L.C.

Indicated PJM Transmission Owners

PJM Interconnection, L.L.C

Public Service Electric and Gas Company

Nos. ER13-198-000, ER13-195-000, ER13-90-000

United States of America, Federal Energy Regulatory Commission

March 22, 2013

Before Commissioners: Jon Wellinghoff, Chairman; Philip D. Moeller, John R. Norris, Cheryl A. LaFleur, and Tony Clark.

ORDER ON COMPLIANCE FILINGS

Paragraph Numbers

I. Background ............................................................................................................................2.

II. Compliance Filings ...............................................................................................................5.

III. Notice of Filing and Responsive Pleadings.........................................................................9.

A. PJM October 25 Filing (Docket No. ER13-198-000) ......................................................9.

B. Indicated PJM Transmission Owners October 25 Filing (Docket No. ER13-195-000) ........................................................................................................................................11.

C. PJM Transmission Owners October 11 Filing (Docket No. ER13-90-000) ....................13.

IV. Discussion ...........................................................................................................................19.

A. Procedural Matters ...........................................................................................................19.

B. Substantive Matters ..........................................................................................................21.

1. Regional Transmission Planning Requirements...........................................................22.

2. Nonincumbent Transmission Developer Reforms .......................................................149.

3. Cost Allocation .............................................................................................................334.

Appendix B: Abbreviated Names of Initial Commenters......................................................__

Appendix C: Abbreviated Names of Reply Commenters......................................................__

Appendix A: Abbreviated Names of Intervenors

Appendix B: Abbreviated Names of Initial Commenters

Appendix C: Abbreviated Names of Reply Commenters

1. On October 25, 2012, PJM Interconnection, L.L.C. (PJM) submitted, pursuant to section 206 of the Federal Power Act (FPA), 1] in Docket No. ER13-198-000 (PJM October 25 Filing), revisions to Schedule 6 of its Operating Agreement (OA) (Schedule 6), as well as conforming revisions to its OA and Open Access Transmission Tariff (OATT) 2] to comply with the local and regional transmission planning requirements of Order No. 1000. 3] Prior to this, on October 11, 2012, the PJM Transmission Owners had submitted, pursuant to section 205 of the FPA, 4] in Docket No. ER13-90-000 (PJM Transmission Owners October 11 Filing), revisions to Schedule 12 of the PJM OATT (Schedule 12) to comply with the cost allocation requirements of Order No. 1000. Also on October 25, 2012, the Indicated PJM Transmission Owners 5] submitted, in Docket No. ER13-195-000, a filing (Indicated PJM Transmission Owners October 25 Filing) in which they posited that Mobile-Sierra protections apply to existing rights of first refusal in PJM’s tariffs and agreements (PJM, PJM Transmission Owners, and Indicated PJM Transmission Owners are collectively referred to as “PJM Parties”). 6] In this order, we conditionally accept the PJM October 25 Filing, subject to further compliance filings, as discussed below. Additionally, we will address the appropriate effective date for PJM’s Order No. 1000 compliant regional transmission planning process in our order addressing PJM’s subsequent compliance filing. We will conditionally accept the PJM Transmission Owners October 11 Filing, effective February 1, 2013, as requested, subject to further compliance filings, as discussed below.

I. Background

2. In Order No. 1000, the Commission amended the transmission planning and cost allocation requirements of Order No. 890 7] to ensure that Commission-jurisdictional services are provided at just and reasonable rates and on a basis that is just and reasonable and not unduly discriminatory or preferential. Order No. 1000’s transmission planning reforms require that each public utility transmission provider: (1) participate in a regional transmission planning process that produces a regional transmission plan; (2) amend its OATT to describe procedures for the consideration of transmission needs driven by public policy requirements established by local, state, or federal laws or regulations in the local and regional transmission planning processes; (3) remove federal ROFRs from Commission-jurisdictional tariffs and agreements for certain new transmission facilities; and (4) improve coordination between neighboring transmission planning regions for new interregional transmission facilities.

3. Order No. 1000’s cost allocation reforms require that each public utility transmission provider participate in a regional transmission planning process that has: (1) a regional cost allocation method or methods for the cost of new transmission facilities selected in a regional transmission plan for purposes of cost allocation; and (2) an interregional cost allocation method or methods for the cost of new transmission facilities that are located in two neighboring transmission planning regions and are jointly evaluated by the two regions in the interregional transmission coordination procedures required by Order No. 1000. Order No. 1000 also requires that each cost allocation method satisfy six cost allocation principles.

4. The Commission acknowledged in Order No. 1000 that each transmission planning region has unique characteristics, and, therefore, Order No. 1000 accords transmission planning regions significant flexibility to tailor regional transmission planning and cost allocation processes to accommodate regional differences.8 Order No. 1000 does not prescribe the exact manner in which public utility transmission providers must fulfill the regional transmission planning requirements.9 Similarly, because the Commission did not want to prescribe a uniform method of cost allocation for every transmission planning region, Order No. 1000 adopts the use of cost allocation principles.10 The Commission stated that it was acting to identify a minimum set of requirements that must be met to ensure that all transmission planning processes and cost allocation mechanisms subject to its jurisdiction result in Commission-jurisdictional services being provided at rates, terms, and conditions that are just and reasonable and not unduly discriminatory or preferential, and it acknowledged that public utility transmission providers in some regions may already meet or exceed some requirements of Order No. 1000.11

II. Compliance Filings

5. In its October 25 Filing, PJM submits revisions to Schedule 6, as well as conforming revisions to the definition sections of its OA and its OATT. PJM states that its current transmission planning process already satisfies many of the requirements of Order No. 1000. Additionally, PJM states that it proposes specific reforms, including procedures to provide for consideration of public policy requirements and a competitive solicitation process for new transmission proposals, that are either consistent with Order No. 1000 or, “due to the unique nature of PJM’s operations and markets, ” are “superior to” Order No. 1000. 12]

6. PJM Transmission Owners in their October 11 Filing submit revisions to Schedule 12, relating to the allocation of costs of transmission system expansions and enhancements approved by the PJM Board of Managers. PJM Transmission Owners state that their proposed revisions comply with the cost allocation principles of Order No. 1000.13] In its October 25 Filing, PJM states that it incorporates the revisions to Schedule 12 of the PJM OATT proposed by PJM Transmission Owners in their October 11 Filing under section 205 of the FPA because it complements the PJM October 25 Filing. Additionally, PJM references the PJM Transmission Owners October 11 Filing as a key component of the PJM October 25 Filing.14

7. PJM states that its October 25 Filing, together with the PJM Transmission Owners October 11 Filing, satisfies PJM’s compliance obligations relative to the regional cost allocation requirements of Order No. 1000. PJM proposes to implement its proposed revisions to Schedule 6 of its OA, as well as its OATT, for the next full 12-month or 24-month planning cycle following a final Commission order approving this compliance filing and any associated subsequent compliance filings. PJM consents to the Commission determining the actual effective date. PJM Transmission Owners propose an effective date of February 1, 2013, for their revisions to Schedule 12 of PJM’s OATT.

8. Finally, in the Indicated PJM Transmission Owners October 25 Filing, the Indicated PJM Transmission Owners submit, in compliance with Order No. 1000-A, a request that the Commission find that PJM’s right of first refusal for non-economic projects is protected by the Mobile-Sierra doctrine, 15] determine that the “public interest” standard of review for setting aside the right of first refusal has not been met, and reject the right of first refusal removal provisions proposed in the PJM October 25 Filing as moot. 16] Indicated PJM Transmission Owners state that although PJM is responsible for its Order No. 1000 compliance filings, the Indicated...

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