Chip Cannon Talks FERC Order 1000 with The Deal

For its article “Let a thousand sparks fly over transmission deals,” The Deal quoted Akin Gump energy regulation, markets and enforcement partner Chip Cannon on the Federal Energy Regulatory Commission’s Order 1000, which, according to the commission, “reforms the Commission’s electric transmission planning and cost allocation requirements for public utility transmission providers.”

One of the ways in which it does so is by stipulating that “Public utility transmission providers must remove from Commission-approved tariffs and agreements a federal right of first refusal for a transmission facility selected in a regional transmission plan for purposes of cost allocation.” The article notes that this will “open…up bidding for electric transmission projects to all qualified developers, and not, as had been true, just the local electric utilities.”

Cannon said, “The primary beneficiaries of Order 1000 are the nonutility developers because it now allows them to be part of the process. While there are some kinks in the process, with the local utilities still acting as the major players, the order sets up a framework to move towards that direction.”  He added, “Fundamentally, more than anything else, Order 1000 was a recognition that the way we develop, plan and construct our grid is outdated, as local concerns do not match up with reality.”

Regarding the fact that the Washington, D.C. Court of Appeals recently upheld Order 1000 and denied petition for review of the final rule, Cannon said, “I was struck by how wholly the court supported Order 1000. It was a clean win for FERC,” noting that the FERC may or may not look to work more closely with states in light of that appellate win. “The question now is whether FERC will take the ball and run with it,” he noted.