[Federal Register Volume 81, Number 153 (Tuesday, August 9, 2016)]
[Notices]
[Pages 52673-52674]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-18826]



[[Page 52673]]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. AD16-18-000]


Competitive Transmission Development Technical Conference; Notice 
Inviting Post-Technical Conference Comments

    On June 27-28, 2016, the Federal Energy Regulatory Commission held 
a Commissioner-led technical conference to discuss issues related to 
competitive transmission development processes, including, but not 
limited to, the use of cost containment provisions, the relationship of 
competitive transmission development to transmission incentives, and 
other ratemaking and transmission planning and development issues.
    All interested persons are invited to file post-technical 
conference comments on the questions listed in the attachment to this 
Notice. Commenters need not respond to all questions asked. Commenters 
should organize responses consistent with the numbering of the attached 
questions and identify to what extent their responses are generally 
applicable, or pertain to a particular transmission planning region. 
Commenters may reference material previously filed in this docket, 
including the technical conference transcript, but are encouraged to 
submit new or additional information rather than reiterate information 
that is already in the record. In particular, Commenters are 
encouraged, when possible, to provide examples in support of their 
answers. These comments are due on or before September 2, 2016.
    For more information about this Notice, please contact:

David Tobenkin (Technical Information), Office of Energy Policy and 
Innovation, (202) 502-6445 [email protected]
Zeny Magos (Technical Information), Office of Energy Market Regulation, 
(202) 502-8244 [email protected]
Erica Siegmund Hough (Legal Information), Office of General Counsel, 
(202) 502-8251 [email protected]

    Dated: August 3, 2016.
Kimberly D. Bose,
Secretary.

Post-Technical Conference Questions for Comment

Panel One: Cost Containment Provisions in Competitive Transmission 
Development Processes 1
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    \1\ Competitive Transmission Development Processes refer to the 
process to select transmission facilities in the regional 
transmission plan for purposes of cost allocation and the process to 
provide a transmission developer of a selected transmission facility 
with the eligibility to use the regional cost allocation method. See 
Further Supplemental Notice of Technical Conference, Attachment--
Description of Key Concepts, Docket No. AD16-18-000, at 13 (June 20, 
2016).
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    1. How do public utility transmission providers in regions compare 
proposals with and without cost containment provisions for transmission 
facilities eligible to be selected in a regional transmission plan for 
purposes of cost allocation? Please provide examples. What, if any, 
guidance or requirements should the Commission provide with respect to 
the comparison of proposals with and without cost containment 
provisions?
    2. What can public utility transmission providers in regions do to 
ensure there is sufficient transparency for transmission developers to 
understand: (a) How a proposal will be evaluated in advance of the 
proposal submission; (b) developments, if any, that occur during the 
evaluation process; and (c) the reasons the selection decision was 
made? Should cost containment provisions in all proposals, and not just 
winning proposals, be made known? What, if any, guidance or 
requirements should the Commission provide with respect to this issue?
    3. Should there be standardization of cost containment provisions 
or exclusions of certain costs to facilitate comparison of proposals 
with differing cost containment provisions? If so, what role should the 
Commission and/or public utility transmission providers in regions play 
in pursuing standardization?
    4. What quantitative and qualitative methods can public utility 
transmission providers in regions use to evaluate proposals with 
different cost containment provisions, such as cost caps with different 
exclusions or that cap different components of the revenue requirement?

Panel Two: Commission Consideration of Rates That Contain Cost 
Containment Provisions and Result From Competitive Transmission 
Development Processes

    1. Should the Commission have a role in evaluating the rate-related 
components of competing proposals for transmission facilities eligible 
to be selected in a regional transmission plan for purposes of cost 
allocation (e.g., terms of cost containment provisions, rate of return, 
transmission incentives) before the public utility transmission 
providers in a region select a proposal? If so, what role? What steps 
could the Commission take to prevent such a role from creating undue 
delays in transmission planning processes?
    2. What types of performance-based rates could the Commission 
accept to reduce asymmetrical risk?
    3. The Commission has accepted proposals to allow incumbent and 
non-incumbent transmission developers to recover, under certain 
circumstances, costs associated with developing transmission projects 
that are proposed but not selected in a regional transmission plan for 
purposes of cost allocation.\2\ Should the Commission reexamine, in 
general, whether such costs may be recovered?
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    \2\ See, e.g., N.Y. Indep. Sys. Operator, Inc., 143 FERC ] 
61,059, at P 326-327 (2013), order on reh'g, 148 FERC ] 61,044, at P 
282 (2014); ISO New England Inc., 143 FERC ] 61,150, at PP 350-351, 
398-401 (2013); and Xcel Energy Southwest Transmission Co., LLC, 149 
FERC ] 61,182, at P 94 (2014).
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    4. Which entities should monitor, verify, and/or enforce compliance 
with cost containment provisions of selected transmission facilities? 
What are effective ways for them to do so and what are the advantages 
and disadvantages of different approaches?

Panel Three: Transmission Incentives and Competitive Transmission 
Development Processes

    1. Should the Commission pre-approve any or all of the following 
incentives for transmission facilities selected in a regional 
transmission plan for purposes of cost allocation through competitive 
transmission development processes: 100 percent construction work in 
progress in rate base; regulatory asset treatment; or recovery of 100 
percent of the cost of abandoned facilities?
    2. If there are benefits to customers from risk mitigation measures 
that transmission developers use in competitive transmission 
development processes, should the Commission revise its incentive 
policy to encourage similar risk mitigation measures that may provide 
customer benefits for

[[Page 52674]]

transmission projects that are not subject to a competitive 
transmission development process? If so, what risk mitigation measures 
should the Commission encourage through application of the incentive 
policy?
    3. In light of the emphasis that Order No. 1000 places on regional 
transmission planning, do the risks and challenges of a particular 
transmission project remain an appropriate focal point for incentives 
requested pursuant to Federal Power Act section 219? If not, what are 
the attributes that warrant incentives?
    4. What, if any, changes are needed to the framework the Commission 
uses to evaluate return on equity adders and other transmission 
incentives for transmission projects that use cost containment 
provisions?
    5. Order No. 1000 requires public utility transmission providers in 
regions to have an ex ante cost allocation method for transmission 
facilities selected in the regional transmission plan for purposes of 
cost allocation. To what extent does the ex ante cost allocation method 
reduce risks to transmission developers?
    6. Transmission developers face at least two types of risks: risk 
associated with participation in the transmission planning processes 
and risk associated with developing a transmission project. The 
Commission's current incentive policies focus on the latter. Please 
comment on risks associated with participation in the transmission 
planning processes and indicate what, if any, changes to the planning 
processes could mitigate the risk.
    7. Do public utility transmission providers in regions consider 
that a transmission developer may request and be awarded transmission 
incentives when evaluating transmission proposals and, if so, how? For 
example, how would public utility transmission providers in regions 
consider a proposal with a potential transmission incentive given that 
the incentive might or might not be granted? Should a competitive 
transmission development process clearly state whether, and, if so, how 
incentives should be part of a developer's proposal and how requests 
and grants of such incentives will be evaluated by the public utility 
transmission providers in the region? Is there an optimal time for 
submission of incentive requests to the Commission and for Commission 
decisions upon them?

Panel Four: Interregional Transmission Coordination Issues

    1. What factors have contributed to the lack of development of 
interregional transmission facilities (i.e., a transmission facility 
that is located in two or more transmission planning regions)? Are 
there actions the Commission could take to facilitate such development?
    2. What would be the advantages and disadvantages to the use of 
common models and assumptions by public utility transmission providers 
in regions in their interregional coordination processes? Are there 
problems that such an approach would solve or create? If such common 
models and assumptions could be developed, how should they be developed 
and by which entity or entities?
    3. Should the Commission revisit Order No. 1000's requirement that 
an interregional transmission facility be selected in the regional 
transmission plan of all transmission planning regions where the 
facility will be located before it is eligible for interregional cost 
allocation? Why or why not?
    4. What reforms, if any, could the Commission adopt to facilitate 
the identification of shared interregional transmission needs?
    5. Do interregional cost allocation methods accepted by the 
Commission, such as the ``avoided cost only'' method, impede 
interregional transmission coordination? \3\ If so, are there 
alternative cost allocation methods that could better facilitate 
interregional transmission development? Would those methods be 
consistent with interregional transmission coordination processes or 
would the interregional transmission coordination processes need to 
change to accommodate such alternative cost allocation methods?
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    \3\ See, e.g. Midcontinent Indep. Sys. Operator, Inc., 150 FERC 
] 61,045, at PP 176-180 (2015) (describing an ``avoided-cost only 
method'' and finding such an approach can comply with Interregional 
Cost Allocation Principle 1).
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Panel Five: Regional Transmission Planning and Other Transmission 
Development Issues

    1. To maximize the benefits of competition, should the Commission 
broaden or narrow the type of transmission facilities that must be 
selected through competitive transmission development processes? If so, 
how?
    2. Has the introduction of competition into the regional 
transmission planning processes led public utility transmission 
providers to focus more on developing local transmission facilities or 
other transmission facilities not subject to competitive transmission 
development processes?
    3. Are there other competitive approaches compared to the existing 
competitive transmission development processes that could potentially 
reduce the time and cost to conduct the process, or the risk of 
litigation over proposal selection, but still benefit consumers? If so, 
what are the strengths and weaknesses of such approaches and could they 
be used in transmission planning regions in specified circumstances, 
for example, for transmission projects needed in the near-term to 
address reliability needs, in conjunction with existing competitive 
transmission development processes?
    4. What types of information (please be specific) could be used to 
measure the impact of the Order No. 1000 reforms on transmission 
development? For example, what information could be used to evaluate 
whether the more efficient or cost-effective transmission facilities 
are being selected within and between transmission planning regions? 
How should that information be tracked and reported or posted? Should 
common metrics be developed for evaluation of the information?
    5. How do the sponsorship model and competitive bidding model, 
respectively, and variations on these models, capture the benefits of 
competition, such as increased innovation and selection of the more 
efficient or cost-effective transmission facilities? What are the 
positive features and drawbacks of each model? How can their drawbacks 
be addressed?
    6. Are changes to the Commission's current application of the 
Discounted Cash Flow (DCF) analysis needed to better accommodate 
nonincumbent transmission developers, in particular with respect to the 
identification of appropriate proxy groups? If so, what changes are 
necessary?

[FR Doc. 2016-18826 Filed 8-8-16; 8:45 am]
 BILLING CODE 6717-01-P