New England prepares for competitive transmission solicitation

U.S. utility regulators have accepted another round of "transmission planning improvement" tariff revisions proposed by New England's regional transmission organization as a measure to enhance the competitiveness of a new process for soliciting proposals for certain transmission improvements. The Federal Energy Regulatory Commission's December 10, 2019 Order Accepting Tariff Revisions filed by ISO New England Inc. brings the region one step closer to its first competitive solicitation for transmission solutions.

New England's path to regional competitive procurement of transmission solutions has been lengthy. In 2001, the Federal Energy Regulatory Commission issued its Order No. 1000, which reformed how public utilities plan and pay for transmission upgrades. Much of the impetus behind Order No. 1000 ultimately derives from shifts in the nation's portfolio of electric generation resources, which helped spur transmission development, but not always in the most cost-effective ways. As a result, the Commission directed public utility transmission providers to revise their tariffs in certain ways with respect to electric transmission planning and cost allocation requirements.

One of the revisions called for in Order No. 1000 is the removal of "provisions from Commission-jurisdictional tariffs and agreements that grant incumbent transmission providers a federal right of first refusal to construct transmission facilities selected in a regional transmission plan for purposes of cost allocation." As described by the Commission, this reform "allows, but does not require, public utility transmission providers in a transmission planning region to use competitive bidding to solicit transmission projects or project developers."

New England's regional grid operator ISO New England Inc. filed a series of tariff revisions implementing changes in response to Order No. 1000, as did other public utility transmission providers. Other regional transmission organizations have subsequently conducted a number of competitive transmission solicitations under the processes created by these tariff revisions. To date ISO-NE has not, but in July 2019 the grid operator gave notice of its intent to initiate the region's first competitive procurement of transmission for the Boston area, and in October it filed further proposed tariff revisions to enhance the competitiveness of the procurement process.

In a December 10 order, the Commission has accepted the October 2019 tariff revisions. In so doing, it found that comments and a protest by the Massachusetts and Connecticut Attorney Generals (respectively) regarding the role of non-transmission alternatives (NTA) in ISO-NE's competitive solicitation process were "outside the scope of this proceeding".

The order paves the way forward for New England's first competitive solicitation of transmission, scheduled for initiation later this year or early in 2020.