A member of the Federal Energy Regulatory Commission reiterated Tuesday that FERC’s Order 1000, which becomes effective October 10, 2011 in the face of considerable opposition from certain elements of the electricity utilities sector, will give regional grid operators the means to improve system reliability and will also stimulate much needed investment in transmission lines.
Order 1000 was heralded by the renewable energy industry as a means of encouraging investment in transmission infrastructure that will move wind and solar power from the west and midwest to the major urban centers further east.
Commissioner Marc Spitzer said that “investment abhors the regulatory chaos that was pre Order 1000” and “we feel that by bringing order out of chaos we’ll bring more investment and, therefore, more reliability to the grid.”
When it issued Order 1000 July 21, 2011, FERC said the regulation requires public utility transmission providers to improve transmission planning processes and allocate costs for new transmission facilities to beneficiaries of those facilities. “It also requires public utility transmission providers to align transmission planning and cost allocation. These changes will remove barriers to development of transmission facilities,” FERC said.
However, even before Order 1000 becomes effective, parts of the utilities sector are clamoring for a rehearing and reconsideration of its measures. Order 1000 opponents include the Edison Electric Institute (EEI), the organization that represents the sector’s largest companies, and the Coalition for Fair Transmission Policy, whose seven members include The Southern Company (NYSE: SO), the largest power company in the U.S., and other large companies.
Another opponent is the American Public Power Association, the service organization that represents about 2,000 community-owned electric utilities.
Order 1000 supporters include WIRES, an organization of 23 transmission providers and regional grid managers that promotes investment in electric transmission and progressive state and federal policies toward that end. Members include Duke Energy Corporation (NYSE: DUK), which will become the largest power company in the U.S. when its merger with Progress Energy, Inc. (NYSE: PGN) is completed later this year. Several WIRES members, including Duke Energy, are also members of the EEI.
Spitzer said Tuesday FERC is reviewing several requests for an Order 1000 rehearing, but has not yet determined whether a formal rehearing will be granted.
Image credit: FERC
DISCLOSURE: The writer has no positions in, or professional connections with, these companies.
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