FERC Order 1000 Transmission Planning and Cost Allocation. FRCC Board Briefing June 28, 2012

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Alicia Malone
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1 FERC Order 1000 Transmission Planning and Cost Allocation FRCC Board Briefing June 28, 2012

2 Agenda Background Order 1000 Compliance Filings Regional Compliance Concepts Florida Sponsors Proposal Florida Stakeholders Counter-Proposal Order 1000 Future Touch Points 2

3 Background Florida Sponsors (FPL, JEA, PEF, OUC, TEC) are the group of Transmission Providers within the FRCC region which have conforming FERC OATTs. Florida Sponsors are developing Order 1000 compliance concepts and supporting a stakeholder process to receive input and comments on the compliance concepts. Current focus is on the development of the regional compliance filings by the Florida Sponsors which are due to be submitted to FERC on October 11,

Florida Sponsors are developing Order 1000 compliance concepts and supporting a stakeholder process to receive

4 Order 1000 Compliance Filings Regional Compliance Filing Oct 11, 2012 Regional Transmission Planning Regional Transmission Cost Allocation Stakeholder Transmission Provider Provisions Public Policy Interregional Compliance Filing Apr 11, 2013 Interregional Transmission Coordination Interregional Cost Allocation 4

Transmission Provider Provisions Public Policy Interregional Compliance Filing

5 Florida Sponsor Proposal 5

6 Florida Sponsor Proposal Regional Transmission Planning Order 1000 changes would build on current FRCC transmission planning processes. Project Sponsors could propose regional transmission projects subject to regional cost allocation (e.g. CEERTS projects). FRCC transmission planning process would be revised to establish a process to fully vet the CEERTS projects. CEERTS threshold criteria would have a linkage to the Florida TLSA in order for the state of Florida to have appropriate review of these regional projects. 6

FRCC transmission planning process would be revised to establish a process to fully vet the CEERTS projects.

7 Florida Sponsor Proposal Regional Cost Allocation Retain FRCC Third Party Impact cost allocation methodology and not incorporate within the Order 1000 cost allocation methodology. Order 1000 Cost Allocation Overall philosophy is to allocate cost of the regional project to the entities that benefit from the project in proportion to the benefits received. Following categories of regional transmission projects to be considered for regional cost allocation: reliability; economic; public policy; or a combination of these. 7

Order 1000 Cost Allocation Overall philosophy is to allocate cost of the regional project to the entities that benefit from the

8 Florida Sponsor Proposal Stakeholder Transmission Providers Would be given an equal opportunity to be a Project Sponsor. Stakeholder transmission developers would need to meet certain project developer qualifications. Public Policy Only those public policies that are present in state or federal laws or regulations would be considered. Criteria has been established for determining if public policy would drive transmission needs. 8

Stakeholder transmission developers would need to meet certain project developer qualifications.

9 Stakeholders Counter-Proposal 9

10 Florida Stakeholders Counter- Proposal: Regional Planning Propose a new FRCC staff function for regional planning as the best way to meet the affirmative obligation and not unduly discriminatory requirements of Order 1000 through proactive regional planning by independent staff. Propose a new subcommittee reporting to the Planning Committee who would be responsible for establishing processes (models, data, assumptions, criteria, etc.) to evaluate economic benefits and benefits of meeting public policy requirements as the best way to meet the in sufficient detail and transparency requirements of Order

Propose a new subcommittee reporting to the Planning Committee who would be responsible for establishing processes (models, data, assumptions, criteria,

11 Florida Stakeholders Counter- Proposal: Cost Allocation Stakeholders propose a regional tariff as the best way to meet the requirements and intent of Order 1000: transparent, clear ex-ante, eliminates disputes by addressing rate treatment up-front through a formulaic approach. roughly commensurate with benefits : allocate costs to zones as defined in FRCC s existing 3 rd party cost allocation methodology, or possibly to the region for very large projects (e.g., > 300 kv). Simplifies cost recovery through a single tariff. Simplifies transmission access to the benefits that are roughly commensurate with allocated costs. 11

roughly commensurate with benefits : allocate costs to zones as defined in FRCC s existing 3 rd party cost allocation methodology, or possibly to the region

12 Other Florida Stakeholders Counterpoints CEERTS project threshold criteria would simply be is it more cost effective and efficient than the projects included in the roll-up plan and not linked to TLSA. Requisite regulatory approvals as opposed to TLSA. A regional tariff eliminates the need for the existing FRCC 3 rd party impacts cost allocation methodology. Different criteria for determining which transmission needs driven by public policy requirements are evaluated. Applies the same qualification requirements to both nonincumbents and incumbents. 12

A regional tariff eliminates the need for the existing FRCC 3 rd party impacts cost allocation methodology.

13 Order 1000 Future Touch Points 13

14 Order 1000 Future Touch Points FRCC Regional Transmission Planning Process will need some revisions. August 8 th - More detailed discussion of Florida Sponsor & Other Florida Stakeholders issues and differences. September 10 th - Florida Sponsor Order 1000 presentation and the FRCC MS Board review of the changes to the FRCC Regional Transmission Planning Process document. 14

August 8 th - More detailed discussion of Florida Sponsor & Other Florida Stakeholders issues

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