In individual states, renewable energy groups are pushing FERC to approve the ISO-NE long-range transmission process

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Brief description of the dive:

• The United States, renewable energy groups and others on Thursday urged the Federal Energy Regulatory Commission to approve ISO New England’s proposal to adopt a long-distance transmission process that involves competitive bidding processes.

• However, some groups said changes would ultimately be necessary to ensure competing transmission companies can effectively bid on projects and to comply with FERC’s recent transmission planning reform, according to documents filed with the agency.

• “Changes to Phase 2 of Long-Term Planning” will capture the benefits of competitive dynamics for consumers, ensure that costs are commensurate with benefits to consumers and distributed equitably, and create a process that addresses the needs of the region and provides opportunities for stakeholder feedback level at every step,” said the New England States Electricity Committee, which represents the region’s governors.

Diving Insights:

ISO-NE and its stakeholders developed planned reforms of the network operator’s transmission process in two stages. Under the first phase approved by FERC in February 2022, ISO-NE will conduct state-required scenario-based and forward-looking transmission analyses.

In February, ISO-NE published its first-ever study of this process – Transmission study in 2050 — which showed New England would need $16 billion to $26 billion in transmission investment by midcentury to meet state policy goals.

The second stage reflected in pending proposal creates an ISO-led process for sourcing and selecting long-term transmission solutions. It also includes a cost allocation process for states that want to build a project that does not meet the cost-benefit threshold.

ISO-NE’s current process of connecting generators one by one is slow, expensive and threatens the state’s efforts to meet climate and economic development goals, by RENEW Northeastwhich represents energy companies and environmental groups.

“Implementing a state-led transmission procurement process will overcome these challenges and accelerate clean energy deployment,” the FERC group said.

However, the proposed process does not take full advantage of competitive offers, which could reduce benefits for consumers and the environment, RENEW said.

According to the group, under the proposal, calls will only be open to projects that fully meet identified transmission needs. Competing developers are prohibited from offering projects that change the transmission system owner’s use and control of an existing right-of-way unless they partner with an incumbent utility, RENEW said.

The story continues

ISO-NE should begin a stakeholder process to review bidding procedures, RENEW said, noting that PJM Interconnection may “mix and match” bid elements in the transmission procurement process.

LS Power and NextEra Energy’s transmission subsidiaries agreed with RENEW in joint comments. According to New Hampshire Transmission and LSP Transmission Holdings II, the proposal effectively gives current transmission system owners a right of first refusal, something FERC has refused to address in its transmission planning and cost allocation rules.

The proposed customer acquisition process is the same as previously used by ISO-NE and subsequently improved, with improvements in transmission reliability and improvements in transmission market efficiency, the companies said.

According to subsidiaries LS Power and NextEra, ISO-NE has changed the process so that competitive bids meet “all or some” identified needs, or a subset thereof.

The limitations of ISO-NE’s proposed competitive bidding rules are highlighted by the network operator’s 2050 Transmission Study, which shows that perhaps most of the needed transmission capacity will be most cost-effectively deployed by upgrading existing lines, by Advanced Energy United.

The industry group urged ISO-NE, NESCOE and utilities to continue developing project selection frameworks to improve competitive opportunities and ensure ISO-NE selects “the best and cheapest solutions for New England ratepayers.”

ISO-NE and its interested parties may use this proposal to meet the requirements of FERC’s new transmission planning and cost allocation rules, pursuant to common comments submitted by the Acadia Center, Conservation Law Foundation, Earthjustice, Natural Resources Defense Council, FERC’s Sustainable Project, Sierra Club and the Union of Concerned Scientists.

Many aspects of the ISO-NE proposal are consistent with FERC Order 1920, but additional changes will be needed in areas including scenario development and schedules, benefit analysis, selection criteria, cost allocation and consideration of advanced transmission technologies, the groups said.