Testimony of Chairman Jon Wellinghoff, Federal Energy Regulatory Commission
Before the House Energy and Commerce Committee, Subcommittee on Energy and Power, United States House of Representatives
Hearing on The American Energy Initiative, October 13, 2011
Full testimony document
Highlights of this testimony:
The development of an efficient transmission system benefits consumers by reducing barriers to trade within and among regions and thereby enhancing competition in wholesale electric markets. With this goal in mind, and recognizing that significant transmission investment is likely to be made in the foreseeable future, the Commission recently issued Order No. 1000.
–First, Order No. 1000 emphasizes regional flexibility and regional action. Order No. 1000 aligns transmission planning and cost allocation to ensure that, when a region identifies transmission projects as needed and desired by that region, the region will have
a method in place for allocating the costs of those projects.
–Second, Order No. 1000 states that those who do not benefit from new transmission facilities should not pay.
–Third, Order No. 1000 is about establishing effective processes for transmission planning and cost allocation, not about requiring specific outcomes from those processes.
–More generally, it is important to note that Order No. 1000 does not establish pre-set regional boundaries, nor does it prescribe how regions plan their systems. Under the rule, each region defines itself.
–The reforms of Order No. 1000 will: (1) ensure that all regions in the Nation produce a regional transmission plan; (2) encourage broad and open consideration by public utilities and their stakeholders of numerous potential solutions to identified needs so that transmission facilities selected in the regional transmission plan for purposes of cost allocation are appropriate solutions for that region; and (3) increase the number of transmission facilities that move from the proposal stage to operation by specifying in advance who would pay for such regionally selected facilities.