The Federal Energy Regulatory Commission (FERC) proposed to revise its electric transmission incentive policy to stimulate the development of transmission infrastructure needed to support the nation’s evolving generation resource mix, technological innovation and shifts in load patterns.
“I’ve been saying for a while now that our transmission incentives policy should focus on consumers and the benefits they will see,” FERC Chairman Neil Chatterjee said. “This proposal would provide the Commission with a clear framework to grant incentives for the most beneficial transmission projects.”
FERC implemented incentives in 2006 and provided additional guidance in 2012.
Under the proposed reforms FECR would increase the incentive for joining and remaining a member of a Regional Transmission Organization, an Independent System Operator or other Commission-approved transmission organization from 50 basis points to 100 basis points and make the incentive available regardless of whether that participation is voluntary; provide 50 basis points transmission projects that meet a pre-construction benefit-to-cost ratio in the top 25 percent of projects examined over a sample period, and an additional 50 basis points for projects that meet a post-construction benefit-to-cost ratio in the top 10 percent of projects studied over the same sample period, afford up to 50 basis points for projects that demonstrate reliability benefits by providing quantitative analysis, where possible, as well as qualitative analysis; and offer a 100-basis-point incentive for transmission technologies that enhance reliability, efficiency and capacity as well as improve the operation of new or existing transmission facilities.
FERC says the proposed measures will more closely align the Commission’s policy with its statutory obligation to provide incentives that benefit consumers by ensuring reliability and reducing the cost of delivered power.
Source: FERC