FTC Submits Comments to FERC on Electricity Transmission Planning and Cost Allocation by Public Utilities

The Federal Trade Commission provided comments to U.S. energy regulators outlining its views on pro-competitive and efficient ways for public utilities to plan for new electricity transmission lines and allocate the costs of paying for them.

The FTC comment is in response to a proposed rulemaking by the Federal Energy Regulatory Commission, known as FERC, that is designed to expand the transmission grid’s capacity to move electricity by clarifying the rules for planning and allocating the costs of new facilities. To do this, FERC is proposing to require transmission service providers under its jurisdiction to:

• engage in regional transmission planning on a broader and more systematic scale;
• take public policy requirements (such as renewable energy portfolios) into account in that planning;
• eliminate federal rights of first refusal that incumbent transmission providers might otherwise use to take over projects proposed by others; and
• explain how the cost of new regional energy projects will be allocated.

In its comment, the FTC addresses three of these issues. First, the comment states that the antitrust laws should not be seen as an obstacle to FERC’s proposed regional planning requirements, which the FTC supports. Next, the FTC supports the elimination of utilities’ rights of first refusal, noting that the antitrust agencies generally oppose regulatory requirements that can block entry by competitors. Finally, the comment urges FERC to give stronger guidance on its proposed rules for allocating the cost of new electricity transmission projects to help bring certainty to such rules and to reduce conflicts that can delay or stymie needed transmission investment.

The FTC vote approving the comment was 5-0. It is available on the FTC’s website and as a link to this press release at http://www.ftc.gov/os/2010/09/100929transmissionplanning.pdf. (FTC File No. V100001; the staff contact is John H. Seesel, Associate General Counsel for Energy, Office of the General Counsel, 202-326-2702; see related press release dated December 8, 2009, at http://www.ftc.gov/opa/2009/12/basf.shtm.

Copies of the documents mentioned in this release are available from the FTC’s website at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.