Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities

The Federal Energy Regulatory Commission is amending the transmission planning and cost allocation requirements established in Order No. 890 to ensure that Commission-jurisdictional services are provided at just and reasonable rates and on a basis that is just and reasonable and not unduly discriminatory or preferential. With respect to transmission planning, this Final Rule requires that each public utility transmission provider participate in a regional transmission planning process that produces a regional transmission plan; requires that each public utility transmission provider amend its OATT to describe procedures that provide for the consideration of transmission needs driven by public policy requirements in the local and regional transmission planning processes; removes from Commission-approved tariffs and agreements a federal right of first refusal for certain new transmission facilities; and improves coordination between neighboring transmission planning regions for new interregional transmission facilities. Also, this Final Rule requires that each public utility transmission provider must participate in a regional transmission planning process that has: A regional cost allocation method for the cost of new transmission facilities selected in a regional transmission plan for purposes of cost allocation; and an interregional cost allocation method for the cost of certain new transmission facilities that are located in two or more neighboring transmission planning regions and are jointly evaluated by the regions in the interregional transmission coordination procedures required by this Final Rule. Each cost allocation method must satisfy six cost allocation principles.