But before we delve in there, let's go back to Sec. 219. Sec. 219 was created before industrial wind was a thing (a thing that makes buckets of money for wind companies). Congress never envisioned using incentives to favor certain kinds of generation, or to encourage the building of a whole bunch of new transmission for the sole purpose of making energy "cleaner." Sec. 219 is for the purpose of "...incentive-based (including performance-based) rate treatments for the transmission of electric energy in interstate commerce by public utilities for the purpose of benefitting consumers by ensuring reliability and reducing the cost of delivered power by reducing transmission congestion." There's a lot in there that just doesn't go with these five ideas. In addition, Sec. 219 was more about "...the enlargement, improvement, maintenance, and operation..." "... to increase the capacity and efficiency of existing transmission facilities and improve the operation of the facilities." Nothing in there about wind. Nothing in there about new transmission, or the size or reach of new transmission, and it is specifically reserved for public utilities. Aren't we off to an auspicious start?
An interregional transmission project has the potential to improve interregional coordination, help to eliminate seams issues, and provide more efficient power flow among regions. Although Order No. 1000 required coordination among neighboring transmission planning regions to identify potential interregional transmission facilities, such projects have been scarce to date.
Q 44) Should the Commission use incentives to encourage the development of interregional transmission projects? How, if at all, would any such incentive interact with Order No. 1000’s reforms?
Q 45) If the Commission should use incentives to encourage interregional transmission projects, should all interregional projects be eligible or should it be based on some other criteria? How should the Commission consider the benefits of an individual interregional transmission project?
Q 46) If the Commission were to grant incentives for interregional transmission projects, what incentive(s) would be appropriate?
Unlocking locationally constrained resources -- nice words for building new transmission to export power from a region where generation is being overbuilt.
The 2012 Incentives Policy Statement provided that “projects that unlock location constrained generation resources that previously had limited or no access to the wholesale electricity markets” may be eligible for incentives. In subsequent years, interconnection queues in many regions of the country have expanded considerably, with many of the potential resources clustered in specific geographic areas with limited transmission access.
Q 47) Should the Commission use incentives to encourage the development of transmission projects that will facilitate the interconnection of large amounts of resources?
Q 48) If so, what metrics could the Commission consider when evaluating whether a transmission project facilitates the interconnection of generation?
Q 49) Should such an incentive focus on resources already in the queue, a region’s potential for new resources, or some other measure? How could the Commission evaluate the potential for further resource development in a particular geographic area?
Incentives for transmission by non-public utilities? Can't be done. Sec. 219 is specifically for public utilities. So, FERC seems to suggest doing an end run here, and providing incentives to public utilities that "partner" with non-public utilities.
Section 219(b)(1) encourages the Commission to facilitate capital investment in transmission infrastructure, regardless of the ownership of those facilities.
Q 50) Are there barriers to non-public utilities’ ownership of transmission facilities?
Q 51) Should the Commission consider granting incentives to promote joint ownership arrangements with non-public utilities and, if so, how?
And why would Google need to partner with a public utility in order to build new transmission for its own needs? Two words... eminent domain. If Google wanted to build and own a transmission project for its own needs, it would not qualify for eminent domain authority to take right of way for the transmission project. I guess FERC thinks that a public utility could use its eminent domain authority to clear a path for Google's transmission project. This would never work in practice. State courts have taken a hard line against non-public utilities (which are essentially private enterprise) using eminent domain to increase their own profits.
This idea is just crazy. Let's move on...
FERC wants to use incentives to encourage its failed Order No. 1000.
The Commission has considered whether it could reduce transmission developer risk by granting blanket pre-approval (i.e., a rebuttable presumption) of three risk-reducing incentives for transmission projects selected in a regional transmission plan for purposes of cost allocation: CWIP, abandoned plant, and regulatory asset treatment.
Q 52) Should these or other incentives be granted automatically for transmission projects selected in a regional transmission plan for purposes of cost allocation?
Q 53) If so, what specific incentives are appropriate for such automatic treatment and how should such incentives be designed?
Following Order No. 1000, the Commission has exercised it discretion to grant certain incentives to non-incumbent transmission developers under section 205 of the FPA, in order to further the public policy goal of placing non-incumbent transmission developers on a level playing field with incumbent transmission owners in Order No. 1000 regional transmission planning processes.
Q 54) Should the Commission continue to use certain incentives to seek to place non-incumbent transmission developers on a level playing field with incumbent transmission owners in Order No. 1000 regional transmission planning processes? If so, should the Commission consider requests for such incentives under section 205, or should the Commission consider requests for such incentives for non-incumbent transmission owners under section 219?
And last in this post... incentives for transmission projects in non-RTO/ISO regions. The "non" regions cover a huge chunk of geography -- huge chunks of the Northwest, Southwest, as well as Southeastern states. Why doesn't FERC award incentives here? Because it created a threshold for incentives that requires a project to be part of a RTO/ISO plan, or for the owner to demonstrate how its project meets Sec. 219's purpose.
Applications for transmission incentives to date have almost exclusively been for transmission projects proposed to be developed within RTOs/ISOs.
Q 55) Are there factors that discourage developers of transmission projects in non-RTO/ISO regions from seeking incentives?
Q 56) What, if any, additional types of incentives could appropriately encourage the development of transmission in non- RTO/ISO regions?
Almost done here... just one last look at the existing incentives, which were bad enough on their own. Maybe FERC thought that by adding a whole bunch of new awful ideas it could make the existing incentives look good by comparison? That's fodder for another day...