81_FR_52826 81 FR 52673 - Competitive Transmission Development Technical Conference; Notice Inviting Post-Technical Conference Comments

81 FR 52673 - Competitive Transmission Development Technical Conference; Notice Inviting Post-Technical Conference Comments

DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission

Federal Register Volume 81, Issue 153 (August 9, 2016)

Page Range52673-52674
FR Document2016-18826

Federal Register, Volume 81 Issue 153 (Tuesday, August 9, 2016) 
[Federal Register Volume 81, Number 153 (Tuesday, August 9, 2016)]
[Notices]
[Pages 52673-52674]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-18826]



[[Page 52673]]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. AD16-18-000]


Competitive Transmission Development Technical Conference; Notice 
Inviting Post-Technical Conference Comments

    On June 27-28, 2016, the Federal Energy Regulatory Commission held 
a Commissioner-led technical conference to discuss issues related to 
competitive transmission development processes, including, but not 
limited to, the use of cost containment provisions, the relationship of 
competitive transmission development to transmission incentives, and 
other ratemaking and transmission planning and development issues.
    All interested persons are invited to file post-technical 
conference comments on the questions listed in the attachment to this 
Notice. Commenters need not respond to all questions asked. Commenters 
should organize responses consistent with the numbering of the attached 
questions and identify to what extent their responses are generally 
applicable, or pertain to a particular transmission planning region. 
Commenters may reference material previously filed in this docket, 
including the technical conference transcript, but are encouraged to 
submit new or additional information rather than reiterate information 
that is already in the record. In particular, Commenters are 
encouraged, when possible, to provide examples in support of their 
answers. These comments are due on or before September 2, 2016.
    For more information about this Notice, please contact:

David Tobenkin (Technical Information), Office of Energy Policy and 
Innovation, (202) 502-6445 david.tobenkin@ferc.gov
Zeny Magos (Technical Information), Office of Energy Market Regulation, 
(202) 502-8244 zeny.magos@ferc.gov
Erica Siegmund Hough (Legal Information), Office of General Counsel, 
(202) 502-8251 erica.siegmund@ferc.gov

    Dated: August 3, 2016.
Kimberly D. Bose,
Secretary.

Post-Technical Conference Questions for Comment

Panel One: Cost Containment Provisions in Competitive Transmission 
Development Processes 1
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    \1\ Competitive Transmission Development Processes refer to the 
process to select transmission facilities in the regional 
transmission plan for purposes of cost allocation and the process to 
provide a transmission developer of a selected transmission facility 
with the eligibility to use the regional cost allocation method. See 
Further Supplemental Notice of Technical Conference, Attachment--
Description of Key Concepts, Docket No. AD16-18-000, at 13 (June 20, 
2016).
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    1. How do public utility transmission providers in regions compare 
proposals with and without cost containment provisions for transmission 
facilities eligible to be selected in a regional transmission plan for 
purposes of cost allocation? Please provide examples. What, if any, 
guidance or requirements should the Commission provide with respect to 
the comparison of proposals with and without cost containment 
provisions?
    2. What can public utility transmission providers in regions do to 
ensure there is sufficient transparency for transmission developers to 
understand: (a) How a proposal will be evaluated in advance of the 
proposal submission; (b) developments, if any, that occur during the 
evaluation process; and (c) the reasons the selection decision was 
made? Should cost containment provisions in all proposals, and not just 
winning proposals, be made known? What, if any, guidance or 
requirements should the Commission provide with respect to this issue?
    3. Should there be standardization of cost containment provisions 
or exclusions of certain costs to facilitate comparison of proposals 
with differing cost containment provisions? If so, what role should the 
Commission and/or public utility transmission providers in regions play 
in pursuing standardization?
    4. What quantitative and qualitative methods can public utility 
transmission providers in regions use to evaluate proposals with 
different cost containment provisions, such as cost caps with different 
exclusions or that cap different components of the revenue requirement?

Panel Two: Commission Consideration of Rates That Contain Cost 
Containment Provisions and Result From Competitive Transmission 
Development Processes

    1. Should the Commission have a role in evaluating the rate-related 
components of competing proposals for transmission facilities eligible 
to be selected in a regional transmission plan for purposes of cost 
allocation (e.g., terms of cost containment provisions, rate of return, 
transmission incentives) before the public utility transmission 
providers in a region select a proposal? If so, what role? What steps 
could the Commission take to prevent such a role from creating undue 
delays in transmission planning processes?
    2. What types of performance-based rates could the Commission 
accept to reduce asymmetrical risk?
    3. The Commission has accepted proposals to allow incumbent and 
non-incumbent transmission developers to recover, under certain 
circumstances, costs associated with developing transmission projects 
that are proposed but not selected in a regional transmission plan for 
purposes of cost allocation.\2\ Should the Commission reexamine, in 
general, whether such costs may be recovered?
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    \2\ See, e.g., N.Y. Indep. Sys. Operator, Inc., 143 FERC ] 
61,059, at P 326-327 (2013), order on reh'g, 148 FERC ] 61,044, at P 
282 (2014); ISO New England Inc., 143 FERC ] 61,150, at PP 350-351, 
398-401 (2013); and Xcel Energy Southwest Transmission Co., LLC, 149 
FERC ] 61,182, at P 94 (2014).
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    4. Which entities should monitor, verify, and/or enforce compliance 
with cost containment provisions of selected transmission facilities? 
What are effective ways for them to do so and what are the advantages 
and disadvantages of different approaches?

Panel Three: Transmission Incentives and Competitive Transmission 
Development Processes

    1. Should the Commission pre-approve any or all of the following 
incentives for transmission facilities selected in a regional 
transmission plan for purposes of cost allocation through competitive 
transmission development processes: 100 percent construction work in 
progress in rate base; regulatory asset treatment; or recovery of 100 
percent of the cost of abandoned facilities?
    2. If there are benefits to customers from risk mitigation measures 
that transmission developers use in competitive transmission 
development processes, should the Commission revise its incentive 
policy to encourage similar risk mitigation measures that may provide 
customer benefits for

[[Page 52674]]

transmission projects that are not subject to a competitive 
transmission development process? If so, what risk mitigation measures 
should the Commission encourage through application of the incentive 
policy?
    3. In light of the emphasis that Order No. 1000 places on regional 
transmission planning, do the risks and challenges of a particular 
transmission project remain an appropriate focal point for incentives 
requested pursuant to Federal Power Act section 219? If not, what are 
the attributes that warrant incentives?
    4. What, if any, changes are needed to the framework the Commission 
uses to evaluate return on equity adders and other transmission 
incentives for transmission projects that use cost containment 
provisions?
    5. Order No. 1000 requires public utility transmission providers in 
regions to have an ex ante cost allocation method for transmission 
facilities selected in the regional transmission plan for purposes of 
cost allocation. To what extent does the ex ante cost allocation method 
reduce risks to transmission developers?
    6. Transmission developers face at least two types of risks: risk 
associated with participation in the transmission planning processes 
and risk associated with developing a transmission project. The 
Commission's current incentive policies focus on the latter. Please 
comment on risks associated with participation in the transmission 
planning processes and indicate what, if any, changes to the planning 
processes could mitigate the risk.
    7. Do public utility transmission providers in regions consider 
that a transmission developer may request and be awarded transmission 
incentives when evaluating transmission proposals and, if so, how? For 
example, how would public utility transmission providers in regions 
consider a proposal with a potential transmission incentive given that 
the incentive might or might not be granted? Should a competitive 
transmission development process clearly state whether, and, if so, how 
incentives should be part of a developer's proposal and how requests 
and grants of such incentives will be evaluated by the public utility 
transmission providers in the region? Is there an optimal time for 
submission of incentive requests to the Commission and for Commission 
decisions upon them?

Panel Four: Interregional Transmission Coordination Issues

    1. What factors have contributed to the lack of development of 
interregional transmission facilities (i.e., a transmission facility 
that is located in two or more transmission planning regions)? Are 
there actions the Commission could take to facilitate such development?
    2. What would be the advantages and disadvantages to the use of 
common models and assumptions by public utility transmission providers 
in regions in their interregional coordination processes? Are there 
problems that such an approach would solve or create? If such common 
models and assumptions could be developed, how should they be developed 
and by which entity or entities?
    3. Should the Commission revisit Order No. 1000's requirement that 
an interregional transmission facility be selected in the regional 
transmission plan of all transmission planning regions where the 
facility will be located before it is eligible for interregional cost 
allocation? Why or why not?
    4. What reforms, if any, could the Commission adopt to facilitate 
the identification of shared interregional transmission needs?
    5. Do interregional cost allocation methods accepted by the 
Commission, such as the ``avoided cost only'' method, impede 
interregional transmission coordination? \3\ If so, are there 
alternative cost allocation methods that could better facilitate 
interregional transmission development? Would those methods be 
consistent with interregional transmission coordination processes or 
would the interregional transmission coordination processes need to 
change to accommodate such alternative cost allocation methods?
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    \3\ See, e.g. Midcontinent Indep. Sys. Operator, Inc., 150 FERC 
] 61,045, at PP 176-180 (2015) (describing an ``avoided-cost only 
method'' and finding such an approach can comply with Interregional 
Cost Allocation Principle 1).
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Panel Five: Regional Transmission Planning and Other Transmission 
Development Issues

    1. To maximize the benefits of competition, should the Commission 
broaden or narrow the type of transmission facilities that must be 
selected through competitive transmission development processes? If so, 
how?
    2. Has the introduction of competition into the regional 
transmission planning processes led public utility transmission 
providers to focus more on developing local transmission facilities or 
other transmission facilities not subject to competitive transmission 
development processes?
    3. Are there other competitive approaches compared to the existing 
competitive transmission development processes that could potentially 
reduce the time and cost to conduct the process, or the risk of 
litigation over proposal selection, but still benefit consumers? If so, 
what are the strengths and weaknesses of such approaches and could they 
be used in transmission planning regions in specified circumstances, 
for example, for transmission projects needed in the near-term to 
address reliability needs, in conjunction with existing competitive 
transmission development processes?
    4. What types of information (please be specific) could be used to 
measure the impact of the Order No. 1000 reforms on transmission 
development? For example, what information could be used to evaluate 
whether the more efficient or cost-effective transmission facilities 
are being selected within and between transmission planning regions? 
How should that information be tracked and reported or posted? Should 
common metrics be developed for evaluation of the information?
    5. How do the sponsorship model and competitive bidding model, 
respectively, and variations on these models, capture the benefits of 
competition, such as increased innovation and selection of the more 
efficient or cost-effective transmission facilities? What are the 
positive features and drawbacks of each model? How can their drawbacks 
be addressed?
    6. Are changes to the Commission's current application of the 
Discounted Cash Flow (DCF) analysis needed to better accommodate 
nonincumbent transmission developers, in particular with respect to the 
identification of appropriate proxy groups? If so, what changes are 
necessary?

[FR Doc. 2016-18826 Filed 8-8-16; 8:45 am]
 BILLING CODE 6717-01-P

Federal Register / Vol. 81, No. 153 / Tuesday, August 9, 2016 / Notices 52673 DEPARTMENT OF ENERGY Dated: August 3, 2016. Panel Two: Commission Consideration Kimberly D. Bose, of Rates That Contain Cost Containment Federal Energy Regulatory Secretary. Provisions and Result From Competitive Commission Transmission Development Processes Post-Technical Conference Questions 1. Should the Commission have a role [Docket No. AD16–18–000] for Comment in evaluating the rate-related Panel One: Cost Containment Provisions components of competing proposals for Competitive Transmission in Competitive Transmission transmission facilities eligible to be Development Technical Conference; Development Processes 1 selected in a regional transmission plan Notice Inviting Post-Technical for purposes of cost allocation (e.g., Conference Comments 1. How do public utility transmission terms of cost containment provisions, providers in regions compare proposals rate of return, transmission incentives) On June 27–28, 2016, the Federal with and without cost containment before the public utility transmission Energy Regulatory Commission held a provisions for transmission facilities providers in a region select a proposal? Commissioner-led technical conference eligible to be selected in a regional If so, what role? What steps could the to discuss issues related to competitive transmission plan for purposes of cost Commission take to prevent such a role transmission development processes, allocation? Please provide examples. from creating undue delays in including, but not limited to, the use of What, if any, guidance or requirements transmission planning processes? cost containment provisions, the 2. What types of performance-based should the Commission provide with relationship of competitive transmission rates could the Commission accept to respect to the comparison of proposals development to transmission incentives, reduce asymmetrical risk? with and without cost containment 3. The Commission has accepted and other ratemaking and transmission provisions? proposals to allow incumbent and non- planning and development issues. incumbent transmission developers to 2. What can public utility All interested persons are invited to transmission providers in regions do to recover, under certain circumstances, file post-technical conference comments ensure there is sufficient transparency costs associated with developing on the questions listed in the for transmission developers to transmission projects that are proposed attachment to this Notice. Commenters understand: (a) How a proposal will be but not selected in a regional need not respond to all questions asked. evaluated in advance of the proposal transmission plan for purposes of cost Commenters should organize responses submission; (b) developments, if any, allocation.2 Should the Commission consistent with the numbering of the that occur during the evaluation reexamine, in general, whether such attached questions and identify to what costs may be recovered? process; and (c) the reasons the extent their responses are generally 4. Which entities should monitor, selection decision was made? Should verify, and/or enforce compliance with applicable, or pertain to a particular cost containment provisions in all cost containment provisions of selected transmission planning region. proposals, and not just winning transmission facilities? What are Commenters may reference material proposals, be made known? What, if effective ways for them to do so and previously filed in this docket, any, guidance or requirements should what are the advantages and including the technical conference the Commission provide with respect to disadvantages of different approaches? transcript, but are encouraged to submit this issue? new or additional information rather Panel Three: Transmission Incentives 3. Should there be standardization of and Competitive Transmission than reiterate information that is already cost containment provisions or Development Processes in the record. In particular, Commenters exclusions of certain costs to facilitate are encouraged, when possible, to 1. Should the Commission pre- comparison of proposals with differing provide examples in support of their approve any or all of the following cost containment provisions? If so, what incentives for transmission facilities answers. These comments are due on or role should the Commission and/or selected in a regional transmission plan before September 2, 2016. public utility transmission providers in for purposes of cost allocation through For more information about this regions play in pursuing competitive transmission development Notice, please contact: standardization? processes: 100 percent construction David Tobenkin (Technical 4. What quantitative and qualitative work in progress in rate base; regulatory Information), Office of Energy Policy methods can public utility transmission asset treatment; or recovery of 100 and Innovation, (202) 502–6445 providers in regions use to evaluate percent of the cost of abandoned david.tobenkin@ferc.gov proposals with different cost facilities? containment provisions, such as cost 2. If there are benefits to customers Zeny Magos (Technical Information), from risk mitigation measures that Office of Energy Market Regulation, caps with different exclusions or that cap different components of the revenue transmission developers use in (202) 502–8244 zeny.magos@ferc.gov competitive transmission development requirement? Erica Siegmund Hough (Legal processes, should the Commission Information), Office of General revise its incentive policy to encourage asabaliauskas on DSK3SPTVN1PROD with NOTICES 1 Competitive Transmission Development Counsel, (202) 502–8251 similar risk mitigation measures that Processes refer to the process to select transmission may provide customer benefits for erica.siegmund@ferc.gov facilities in the regional transmission plan for purposes of cost allocation and the process to 2 See, e.g., N.Y. Indep. Sys. Operator, Inc., 143 provide a transmission developer of a selected FERC ¶ 61,059, at P 326–327 (2013), order on reh’g, transmission facility with the eligibility to use the 148 FERC ¶ 61,044, at P 282 (2014); ISO New regional cost allocation method. See Further England Inc., 143 FERC ¶ 61,150, at PP 350–351, Supplemental Notice of Technical Conference, 398–401 (2013); and Xcel Energy Southwest Attachment—Description of Key Concepts, Docket Transmission Co., LLC, 149 FERC ¶ 61,182, at P 94 No. AD16–18–000, at 13 (June 20, 2016). (2014). VerDate Sep<11>2014 20:00 Aug 08, 2016 Jkt 238001 PO 00000 Frm 00064 Fmt 4703 Sfmt 4703 E:\FR\FM\09AUN1.SGM 09AUN1

52674 Federal Register / Vol. 81, No. 153 / Tuesday, August 9, 2016 / Notices transmission projects that are not transmission facilities (i.e., a 3. Are there other competitive subject to a competitive transmission transmission facility that is located in approaches compared to the existing development process? If so, what risk two or more transmission planning competitive transmission development mitigation measures should the regions)? Are there actions the processes that could potentially reduce Commission encourage through Commission could take to facilitate such the time and cost to conduct the application of the incentive policy? development? process, or the risk of litigation over 3. In light of the emphasis that Order 2. What would be the advantages and proposal selection, but still benefit No. 1000 places on regional disadvantages to the use of common consumers? If so, what are the strengths transmission planning, do the risks and models and assumptions by public and weaknesses of such approaches and challenges of a particular transmission utility transmission providers in regions could they be used in transmission project remain an appropriate focal in their interregional coordination planning regions in specified point for incentives requested pursuant processes? Are there problems that such circumstances, for example, for to Federal Power Act section 219? If not, an approach would solve or create? If transmission projects needed in the what are the attributes that warrant such common models and assumptions near-term to address reliability needs, in incentives? could be developed, how should they be conjunction with existing competitive 4. What, if any, changes are needed to developed and by which entity or transmission development processes? the framework the Commission uses to entities? 4. What types of information (please evaluate return on equity adders and 3. Should the Commission revisit be specific) could be used to measure other transmission incentives for Order No. 1000’s requirement that an the impact of the Order No. 1000 transmission projects that use cost interregional transmission facility be reforms on transmission development? containment provisions? selected in the regional transmission For example, what information could be 5. Order No. 1000 requires public plan of all transmission planning used to evaluate whether the more utility transmission providers in regions regions where the facility will be efficient or cost-effective transmission to have an ex ante cost allocation located before it is eligible for facilities are being selected within and method for transmission facilities interregional cost allocation? Why or between transmission planning regions? selected in the regional transmission why not? How should that information be tracked plan for purposes of cost allocation. To 4. What reforms, if any, could the and reported or posted? Should what extent does the ex ante cost Commission adopt to facilitate the common metrics be developed for allocation method reduce risks to identification of shared interregional evaluation of the information? transmission developers? transmission needs? 6. Transmission developers face at 5. How do the sponsorship model and 5. Do interregional cost allocation competitive bidding model, least two types of risks: risk associated methods accepted by the Commission, respectively, and variations on these with participation in the transmission such as the ‘‘avoided cost only’’ method, models, capture the benefits of planning processes and risk associated impede interregional transmission competition, such as increased with developing a transmission project. coordination? 3 If so, are there innovation and selection of the more The Commission’s current incentive alternative cost allocation methods that efficient or cost-effective transmission policies focus on the latter. Please could better facilitate interregional facilities? What are the positive features comment on risks associated with transmission development? Would and drawbacks of each model? How can participation in the transmission those methods be consistent with their drawbacks be addressed? planning processes and indicate what, if interregional transmission coordination 6. Are changes to the Commission’s any, changes to the planning processes processes or would the interregional current application of the Discounted could mitigate the risk. 7. Do public utility transmission transmission coordination processes Cash Flow (DCF) analysis needed to providers in regions consider that a need to change to accommodate such better accommodate nonincumbent transmission developer may request and alternative cost allocation methods? transmission developers, in particular be awarded transmission incentives Panel Five: Regional Transmission with respect to the identification of when evaluating transmission proposals Planning and Other Transmission appropriate proxy groups? If so, what and, if so, how? For example, how Development Issues changes are necessary? would public utility transmission [FR Doc. 2016–18826 Filed 8–8–16; 8:45 am] 1. To maximize the benefits of providers in regions consider a proposal BILLING CODE 6717–01–P competition, should the Commission with a potential transmission incentive broaden or narrow the type of given that the incentive might or might transmission facilities that must be not be granted? Should a competitive DEPARTMENT OF ENERGY selected through competitive transmission development process transmission development processes? If Federal Energy Regulatory clearly state whether, and, if so, how so, how? Commission incentives should be part of a 2. Has the introduction of competition developer’s proposal and how requests into the regional transmission planning Combined Notice of Filings and grants of such incentives will be processes led public utility transmission evaluated by the public utility providers to focus more on developing Take notice that the Commission has transmission providers in the region? Is local transmission facilities or other received the following Natural Gas asabaliauskas on DSK3SPTVN1PROD with NOTICES there an optimal time for submission of transmission facilities not subject to Pipeline Rate and Refund Report filings: incentive requests to the Commission competitive transmission development and for Commission decisions upon Filings Instituting Proceedings processes? them? Docket Numbers: RP16–1109–000. Panel Four: Interregional Transmission 3 See, e.g. Midcontinent Indep. Sys. Operator, Applicants: Wyoming Interstate Coordination Issues Inc., 150 FERC ¶ 61,045, at PP 176–180 (2015) Company, L.L.C. (describing an ‘‘avoided-cost only method’’ and 1. What factors have contributed to finding such an approach can comply with Description: Section 4(d) Rate Filing: the lack of development of interregional Interregional Cost Allocation Principle 1). Negotiated Rate Non Conforming VerDate Sep<11>2014 20:00 Aug 08, 2016 Jkt 238001 PO 00000 Frm 00065 Fmt 4703 Sfmt 4703 E:\FR\FM\09AUN1.SGM 09AUN1


Document Created: 2016-08-09 01:10:15
Document Modified: 2016-08-09 01:10:15
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation81 FR 52673 
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