Order No. 1000 - One-Year Later

Compliance filings to implement the regional planning and cost allocation provisions of Order No. 10001 have been submitted to the Federal Energy Regulatory Commission ("FERC" or the "Commission") since October. These filings, FERC's review of them, and their implementation will reveal more fully the implications of Order No. 1000, including the expansion of the nation's transmission network and related cost responsibilities. This article briefly summarizes why industry stakeholders should be interested in the implementation of Order No. 1000 and what stakeholders can do to protect their interests.

1. Commission Developments to Date

   On July 21, 2011, the Commission issued Order No. 1000, amending the transmission planning and cost allocation requirements established in Order No. 890. Those amendments required public utility transmission providers to revise their tariffs to reflect regional and interregional transmission planning and cost allocation. FERC also stated that Public Policy Requirements must be considered as part of regional and local transmission plans. Public Policy Requirements include – Order No. 1000 also required removal of the right of first refusal ("ROFR") to construct new transmission facilities selected in a regional transmission plan for purposes of cost allocation from Commission jurisdictional tariffs and agreements. (For more discussion of Order No. 1000, please see the Paul Hastings client alert dated August 2011 that discusses Order No. 1000 in greater detail.)2

   On May 17, 2012, the Commission issued Order No. 1000-A, affirming Order No. 1000 and granting certain clarifications. On October 18, 2012, the Commission issued Order No. 1000-B granting certain further clarifications and affirming Order No. 1000.3 Compliance filings including regional transmission plans and cost allocation methods were due from public utility transmission providers by October 11, 2012, although several entities sought and obtained extensions of that deadline. Interregional transmission coordination plans and cost allocation methods are due by April 11, 2013.4 Comments are due on some of the initial Order No. 1000 Compliance Filings as early as November 26 (for those filings submitted on October 11) and December 10 (for filings submitted October 25).

   As Order No. 1000 set forth principles for transmission planning and cost allocation, rather than mandate specific methods, the submitted compliance filings and their implementation will reveal the practical implications of Order No. 1000. These practical implications include how entities outside of regional transmission organizations ("RTOs") and independent system operators ("ISOs"), RTOs/ISOs, non-public utilities, and merchants will participate in Order No. 1000 processes, how to propose projects for inclusion in regional plans, cost allocation, and the stakeholder/enrollee distinction.

2. Compliance In Regions Outside of RTOs/ISOs

   Order No. 1000 required public utility transmission providers in non-RTO regions to reach agreement on transmission planning and cost allocation.5 Such transmission providers may be working with several transmission planning entities and owners, within an area encompassing a number of different states, in order to reach a single greatly expanded regional planning process. Some such non-RTO regions may also include non-public utility transmission providers, ("NTPs").

   Entities outside of non-RTO regions face unique challenges in implementing Order No. 1000. As one such example, the Mid-Continent Area Power Pool ("MAPP") needed to cooperate with its members (all non-public utilities – with the exception of NorthWestern Corporation, or "NorthWestern") to address Order No. 1000 compliance. In NorthWestern's Order No. 1000 Compliance Filing, NorthWestern stated that it understood that most, if not all, of the other MAPP members would not be making Order No. 1000 compliance filings at this time because of their NTP status.6

   Further, as illustrated by NorthWestern, the MAPP region includes states that also fall within the Western Electricity Coordinating Council and MISO regions, including Iowa, North Dakota, South Dakota, Minnesota, and Nebraska. This may prove significant as MAPP completes its compliance filing to meet the Commission's interregional planning and cost allocation reform.

3. Round Up - Initial Order No. 1000 Compliance Filings In Regions With RTOs/ISOs

   A very brief overview of the compliance filings by RTOs and ISOs is included below. For greater detail, please review the compliance filings made by these entities. Also, note that the Southwestern Power Pool, Inc. ("SPP") obtained an extension until November 12 for its Order No. 1000 compliance filing.7

   As illustrated below, a number of these filings assert that much of the RTO's and ISO's existing tariffs meet Order No. 1000's requirements. They also introduce various updated approaches to cost allocation and planning, as well as ROFR reform. Changes to the cost allocation included in several Order No. 1000 compliance filings must also be closely reviewed. Once accepted by the Commission, those cost allocation rules will apply to that transmission provider's transmission planning and cost allocation process. As a result, if an entity later objects to the cost allocation methodology that has been approved as part of the Order No. 1000 compliance process, then it is up to that entity to file a Section 206 complaint with FERC to demonstrate why the methodology is unjust and unreasonable. This may be difficult, because the presumption is that the methodology is just and reasonable based on the Commission's previous acceptance of the methodology.

   In addition, certain RTOs and ISOs have argued in their filings that Mobile-Sierra8protects them from making certain revisions to their transmission owner agreements.

   1. PJM

      The first Order No. 1000 compliance filing for PJM included the filing by PJM's Transmission Owners ("TOs") in Docket No. ER13-90-000 on...