Sunday, April 30, 2017

PJM, SPP Chiefs Share Frustration with Order 1000

By Rich Heidorn Jr.

CARY, N.C. — PJM CEO Andy Ott and SPP CEO Nick Brown said last week that FERC Order 1000 is causing their staffs headaches while doing little to encourage transmission development.

PJM SPP FERC Order 1000

Nick Brown | © Cassondra Wilson, SAS Institute Inc.

“I think the driver behind Order 1000 was to get more people wanting to invest in transmission,” Ott told the RTO Insider/SAS ISO Summit last week, where he appeared on a panel with Brown and former FERC Commissioner Tony Clark, who participated via phone after snow canceled his flight from D.C. “We haven’t had any shortage of [interest]. In fact, everyone wants to invest in transmission because it’s a pretty safe investment. [Order 1000] was almost like a solution in search of a problem. … It’s actually creating more challenges to investment.”

PJM SPP FERC Order 1000

Andy Ott | © Cassondra Wilson, SAS Institute Inc.

“It created more overhead and more uncertainty at a time when we didn’t need more overheard in order to invest in transmission,” said Brown. “I am thankful that we completed the vast majority of our transmission buildout in a pre-Order 1000 environment.”

Ott said enforcing cost caps on competitive projects and allocating costs for them are tasks that RTOs are ill-equipped to handle. “We’re not a regulator,” he said.

Clark, who joined the commission after the order was issued in 2011, said the intent of the initiative was good, noting that it has pushed regions to conduct joint planning.

“The concern that I always had … is that there is so much process built into Order 1000,” each step of which becomes an opportunity for litigation and delay, Clark said.

PJM SPP FERC Order 1000

Rich Heidorn Jr., RTO Insider; Andy Ott, PJM; Nick Brown, SPP listen as Former FERC Commissioner Tony Clark speaks to the ISO Summit audience via telephone | © Ted Caddell, RTO Insider

“What you end up with is just what Andy and Nick were talking about, which is actually less investment happening than would otherwise happen organically on its own because you’re doing so much to meet the burdens of the process in Order 1000 that you’re sort of losing the forest for the trees.”

Clark said it’s too soon to determine whether the order will be successful in introducing competition into transmission development. “Incumbents have so many natural advantages in terms of building large infrastructure projects within their footprint that I don’t know that that’s something you can regulate away. Nor should we necessarily try to.”

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