LPPC and Advocacy Groups Advance Transmission Planning Cost Management Proposal at FERC

Advocates Advance Transmission Planning Cost Management Proposal at FERC

LPPC, ACEG, CEBA, and NASUCA Lead Collective Effort to Balance Consumer Interests with Improved Transmission Planning

Washington (March 6, 2024) – A group of diverse advocates representing public power utilities, clean energy, consumer interests, and transmission developers have joined together to advance a proposal that encourages the Federal Energy Regulatory Commission (FERC) to integrate cost management protocols in its final rulemaking on regional transmission planning (Docket No. RM21-17).  

The Large Public Power Council (LPPC), Americans for a Clean Energy Grid (ACEG), Clean Energy Buyers Association (CEBA), and the National Association of State Utility Consumer Advocates (NASUCA) have endorsed the proposal, designed to help ensure that large-scale regional transmission planning is managed in a way that protects consumers from unforeseen costs, improves grid reliability and efficiency, and integrates new generating resources.  

Drawing on the record in the transmission planning docket, the group’s Consensus Cost Management Proposal calls on FERC to include in its final rule the requirement that Transmission Providers propose protocols providing for cost management and critical decision-making throughout the period leading to a project's construction in their compliance filings. These protocols would provide for reconsideration of a project where cost and benefit projections deviate substantially from those upon which projects were approved for cost allocation. This framework will help ensure that transmission, pivotal to integrating new resources and improving grid reliability, flexibility, and resilience, can be planned and built in a cost-conscious way.

"Striking a balance between advancing clean energy goals and protecting consumers from unforeseen costs is essential as FERC considers large-scale regional transmission planning.  Our Consensus Cost Management Proposal, crafted collaboratively with leading voices in clean energy advocacy and consumer interests, underscores our commitment to safeguarding public power customers from undue financial burden while accelerating the clean energy transition. By urging FERC to integrate this framework into its final transmission planning rule, we lay the groundwork for a clean, reliable, and cost-conscious electric grid that will meet the needs of public power communities today and tomorrow,” said John Di Stasio, President of LPPC.

“We need more high-capacity transmission for households and businesses across the country to have access to reliable and affordable electricity. But we must remain mindful of the cost impact of these projects on customers. ACEG supports this proposal—and encourages FERC to integrate into its comprehensive transmission rulemaking—because it reflects a proven and balanced methodology to both protect customers from unreasonable price spikes and encourage the development of well-planned and necessary high-capacity transmission,” said Christina Hayes, Executive Director of ACEG.

“Energy customers need and expect grid reliability, reasonable rates, and clean energy. As we add needed clean generation to meet rapidly growing customer demand and as FERC considers a regional transmission rule to proactively and comprehensively plan for a grid system optimized for reliability, cost savings, and economic development, cost management needs to remain central to protect customers from unforeseen costs,” said Bryn Baker, Senior Director of Market and Policy Innovation at CEBA.

“Consumers benefit when transmission is planned to find the lowest delivered cost of energy, and we expect the rule will direct that. But given the existence of risks and uncertainties, this additional provision can provide further consumer protection to make sure prudent investments are made on their behalf,” said Rob Gramlich, President of Grid Strategies, who helped facilitate discussions leading to the consensus.

FERC Docket No. RM21-17 – Transmission Planning and Cost Allocation

Consensus Cost Management Proposal

The signatories express general support for long-term multi-benefit transmission planning and the proposals in the RM21-17 NOPR. We also believe that prudent transmission cost management is essential for successful transmission development and for FERC to carry out its statutory responsibility. The signatories further recognize that there is a risk of meaningful cost escalation from the date a project is approved for cost allocation purposes until the date on which construction begins, given the time it may take to secure needed state, federal and local approvals.  With that in mind, the parties call for FERC to require in the final rule that Transmission Providers in their compliance filings propose protocols providing for cost management and critical decision-making throughout the period leading to a project's construction.  These protocols must provide for reconsideration of a project where cost and benefit projections deviate substantially from those upon which projects were approved for cost allocation.

Features of an acceptable program may include the following:

  • Sponsors of all projects approved by a region for cost allocation will be required to file and post public reports at periodic intervals tracking anticipated project costs against projections upon which projects were approved, and updated information on the benefits of the projects (where projects have been approved on the basis of a benefit-cost ratio).  Regional planning entities will be required to track and post those reports.
  • Where periodic reports indicate that costs have exceeded an identified threshold percentage, or (where projects have been approved on a benefit-cost ratio basis) the benefit-cost ratio upon which a project has been approved declines by an identified threshold percentage, a public process will be initiated to reconsider designation of the project for cost allocation.  That process will consider the following parameters:

    - An acceptable threshold for such reconsideration may be 25% or more (consistent with a Variance Analysis in MISO's Tariff (Attachment FF, Section IX.C).

    - Where projects have been initially approved on the basis of a benefit-cost ratio, reconsideration will not be undertaken where projects continue to show a benefit-cost ratio above the initially acceptable threshold for approving a project.  Benefits shall be assessed using the same methodology as was used for initial approval, but with updated inputs such as fuel costs and market prices.

    - Reconsideration will not be undertaken for the purpose of reexamining support for the determination of benefits that underlie the basis on which projects were initially approved.

    - Sponsors of identified projects which are subject to reconsideration will be permitted to present mitigation plans or further argument in support of the project.

    - Review will be available under these procedures until construction of the relevant project begins (i.e., the physical site for the proposed project has been altered).

    - Where a project has been cancelled pursuant to these procedures, the project sponsors will be eligible for abandoned cost recovery consistent with FERC policy, absent a showing of imprudence.
  • The foregoing processes will be administered by regional planning entities (RTOs/ISOs, where they exist) that have assumed responsibility for administering project selection and cost management. Where such organizations have not assumed such responsibility, reconsideration of approved projects will be undertaken in regional stakeholder processes convened to comply with the planning and cost allocation rule.  In either case, review of decisions made at the regional planning level will be undertaken by the Commission upon petition.

Where RTOs/ISOs have existing cost management protocols in place, they may demonstrate in compliance filings responding to the Commission's rule that they are consistent with or superior to the pro forma requirement.

LPPC Announces Jackie Flowers and Javier Fernandez as New Chair and Vice Chair
LPPC Responds to FERC’s Final Transmission Planning Rule
LPPC Issues Statement on EPA's Final Power Plant Rule
Public Power Leaders Attend LPPC’s Inaugural Members Conference
Broad coalition floats cost containment proposal as FERC eyes final grid rule
Groups Urge Inclusion of Cost Containment in FERC Tx Planning Rule
Energy Groups Press Regulators to Scrutinize Power Grid Costs
LPPC and Advocacy Groups Advance Transmission Planning Cost Management Proposal at FERC
LPPC Discusses Electrification at USEA's 2024 State of the Energy Industry Forum
PUF Covers LPPC Grid Reliability Event with Sen. Kevin Cramer
LPPC Hosts a Discussion on Reliability with Sen. Kevin Cramer (R-ND)
Where Community Matters Most
LPPC Announces Tom Falcone, CEO of LIPA, and Jackie Flowers, Director of Utilities at Tacoma Public Utilities, as New Chair and Vice Chair
Commentary: Look no further than Long Island for a case for public power
Navigating the Path to a Sustainable and Reliable Power Supply
Clearing the Path for Permitting Reform
Leading on Clean Energy Expansion
Fitch Says Deleveraging Era Over For Public Power Utilities
LPPC Welcomes Nashville Electric Service as Newest Member
IRS guidance on renewable tax credit transferability, direct-pay provisions of IRA, garners mixed reviews
Treasury Proposes Rules on Monetizing Energy Tax Credits
Domestic Content Rules for Direct Pay Continue to Lack Clarity and Certainty
President’s Post: Permitting Reform & Protecting Direct Pay Priorities as LPPC CEOs Meet with Members of Congress
US Releases Made-in-America Rules for Clean Energy Credits
LPPC Calls for Certainty and Clarity on Domestic Content Requirements
Can Utilities Rise To The Challenges Presented By Decarbonization?
Panel Debates Impact of Renewables, Electrification on Reliability
To Electrify America, Advance Permitting Reform
LPPC Discusses Pathways to Decarbonization at USEA’s 2023 State of the Energy Industry Forum
LPPC Discusses Clean Energy Tax Credits and Decarbonization with Bloomberg Government
LPPC Provides Comments to Treasury on Clean Energy Tax Credits
President's Post: Public Power CEOs and Federal Policymakers Convene at LPPC's Post-Election Forum
LPPC CEOs Present at the Public Power Community Forum
LPPC at National Clean Energy Week
LPPC Chair and Austin Energy General Manager, Jackie Sargent, Discusses Carbon-Free Goals and More on Grid Talk
U.S. public power sector tackles emerging ESG challenges, inflation
Chair’s Post: Embracing Diversity, Equity and Inclusion to Secure our Energy Future
LPPC Submits Comments to FERC on Transmission Planning
LPPC Leads Cross-Industry Push for E-Mobility
LPPC Members Fly In to Advocate for Public Power Communities
A Preview of Energy Transition Hopes and Hurdles for 2022
API Taps New Chief Lobbyist
LPPC Signs Joint Letter on Sequestration and Direct Subsidy Bonds
Joint Public Finance Network Letter to Congress In Support of Legislation In Response to COVID-19
Letter to Congress Regarding Near-Term for Customers and Communities in Response to COVID-19
LPPC Federal Reserve Municipal Liquidity Facility Letter
Joint Trades Community Owned Utility Direct Pay Letter
Letter to Treasury of Private Use
Letter to Treasury on Priority Guidance
GridWise Alliance and Grid Infrastructure Advisory Council Letter
Tulsa World: Utility Workers—A New, Unsung Hero Emerges During Times of Crisis
S&P Global: Municipal Utilities Call For Return Of Financial Tools To Get Through Pandemic
Morning Consult: Hidden Heroes Keeping The Lights On
Utility Dive: The (Energy) Efficient Road to Small Business Recovery
S&P Global: Public Power Utilities Say They Have 'Weathered' COVID-19 Storm; S&P Adds, 'So Far'
The Bond Buyer: Power Utilities Still Plan Capital Improvements
Morning Consult: Utilities Coalition Letter Rallies Congress to Include Support for Public Power in Coronavirus Stimulus
Morning Consult: Worldwide Denial-of-Service Cyberattacks on Utilities Up Five-Fold This Summer, Data Shows
Utility Dive: Public Power Leaders See Lasting Effects from 2020 Disruptions with New Approaches to Resilience, Equity
Public Utilities Fortnightly: Saluting the Workforce at Large Public Power Council; Conversation with LPPC president John Di Stasio
E&E News: Quest for 'Common Ground' Continues as Clock Ticks
POLITICO Morning Energy: Defending from Future Cyber Attacks
Agri-Pulse: Biden's Clean Power Target Poses Stiff Challenge for Some Rural Power Providers
PV Magazine: Sunrise Brief - Leaders Urge Support for Clean Energy Tax Breaks that Benefit Public Power
POLITICO: How Much Companies That Paid No Corporate Income Tax Spent on Lobbying
Utility Dive: Utilities to DOE - More Information, Not New Regulations, Needed to Secure the Grid
The Hill: Want a Clean Energy Future? Look to the Tax Code.
2022 Public Power Community Conference: Navigating an Industry in Transition
President’s Post: Fulfilling Our Mission to Benefit Public Power and America
Keeping America Powered: Meet Utility Workers Essential To Their Communities (Part 3)
Keeping America Powered: Meet Utility Workers Essential To Their Communities (Part 2)
Keeping America Powered: Meet Utility Workers Essential To Their Communities (Part 1)
Meet Our Essential Workers: Performing a Critical Role in Our Communities
E&E News: FERC unveils transmission plan seen as key for renewables
Canary Media: The US needs to build a bigger, stronger grid. FERC has a plan for that.
Austin Energy and LIPA Leaders Take the Reins at LPPC
LPPC Urges Congress to Consider Public Financing Tools in any COVID-19 Economic Stimulus Bill
LPPC Urges Congress to Support Public Power Communities
Large Public Power Council Chair and Vice-Chair Offer Insight on Response to the Coronavirus, Plans for Re-entry
LPPC Issues Statement on Clean Energy Innovation and Deployment Act of 2020
LPPC Calls on Congress to Prioritize Public Sector Infrastructure Investment
LPPC Issues Statement Regarding EPA’s Proposed Rulemaking on Mercury and Air Toxics Standards (MATS)
Large Public Power Council Welcomes Austin Energy General Manager Jackie Sargent as New Chair, Long Island Power Authority CEO Tom Falcone Elected Vice Chair
LPPC Issues Joint Statement Regarding FERC’s Proposed Rule on Transmission Planning