BIG TRANSMISSION RULING

WIRES: FERC's Transmission Final Rule Is a Welcome Development
J. Jolly Hayden, July 21, 2011 (Working group for Investment in Reliable and Economic electric Systems, WIRES)

"…The FERC transmission planning and cost allocation final rule goes a long way towards putting the public policy pieces in place that will produce a robust U.S. interstate power infrastructure.

"…The rule removes one of the obstacles to developing the grid that the U.S. needs for the 21st Century – narrow cost allocation that does not recognize the way the grid operates and impedes cost recovery for grid investment…"

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"…Under this new rule, no one who does not benefit from new transmission projects will pay for grid expansion. But the rule recognizes the broad reliability, economic, and public policy benefits from grid expansion and avoids the mistake of adopting a rigid benefits test…[It also makes] the planning of projects, especially those that cross state or RTO boundaries or otherwise affect the interstate market, more systematic. Efficient and open decision making in all regions serves the larger public interest.

"…[W]e want to express our support for the Commission's effort to move the transmission industry towards the strong, smart network transmission system that a modern economy needs…[I]nvestments in the grid are needed to promote fuel diversity and greater reliability…Investments…could create up to 200,000 jobs annually over the next two decades…"