ISO-NE and stakeholders are developing Order 1000 compliance plans

ISO-NE is largely in compliance with FERC’s recent order on transmission planning and cost allocation

The Federal Energy Regulatory Commission’s Order 1000, issued July 21, 2011, provides a  roadmap for regional planning and cost allocation for transmission projects in North America. The order addresses several  complex issues that are deemed to be essential for open, transparent, and efficient transmission planning, but that have been addressed with varying success in different parts of the country.

The rule addresses four major areas. It requires each public utility transmission provider to participate in a regional planning process that results in a regional transmission plan; requires each public utility transmission provider to consider public policy goals in its local and regional transmission planning processes; calls for improved coordination between neighboring transmission planning regions for new regional transmission facilities; and directs the removal  from any FERC-jurisdictional document of rights of first refusal for incumbent transmission owners to build certain new transmission facilities.  A fifth element of the order requires each public utility transmission provider to have a planning process that includes methods for both regional and interregional allocation of the costs of new transmission facilities. The order lays out six guiding principles for those cost allocation methods.

With a robust stakeholder process in place for more than a decade, resulting annually in a Regional System Plan, and a well-established cost-allocation process for transmission projects needed for reliability or market efficiency, New England is largely in compliance with Order 1000. ISO New England has engaged in interregional planning with the New York ISO (NYISO) and PJM Interconnection since the grid operators were formed in the late 1990s, and has worked with those two regions under a formal planning protocol since 2003. The ISO is also involved with the Eastern Interconnection Planning Collaborative, a coalition of planning authorities in the Eastern Interconnection.

Two areas exist where material changes may be necessary to the ISO New England tariff in order to comply with Order 1000. Those involve planning and cost allocation for transmission projects driven by public policy objectives, rather than reliability needs or market efficiency, and interregional cost allocation.

In developing comments on the draft rule, ISO New England, NEPOOL (the organization of market participants in New England) and the New England States Committee on Electricity agreed that the New England states should take the lead in identifying public policy goals driving transmission needs, deciding how to evaluate solutions, and deciding how to allocate costs for public policy projects. NESCOE has posted on its website a draft framework to address Order 1000’s provisions regarding public policy projects and cost allocation.  ISO-NE is working jointly with the states and all stakeholders to develop the process by which the ISO will identify and incorporate public policy into the regional transmission process.

Regarding interregional planning and cost allocation, ISO New England has a long history of coordinated planning with NYISO, PJM, and its Canadian neighbors.  In assessing current compliance, it appears that some additional detail may need to be added to the Northeastern ISO/RTO Planning Coordination Protocol  with NYISO and PJM.  With regard to interregional cost allocation, to date each ISO has paid for the portions of cross-border projects that are located within its territory. However, there is no formal cost allocation process in place.

ISO New England, the states and other stakeholders are working to develop the region’s Order 1000 compliance proposal. The deadline for filing a proposal to meet all Order 1000 requirements except those involving interregional planning and cost allocation is October, 2012. The compliance filing addressing interregional planning and cost allocation is due in April, 2013.