By Robert Mullin

A proposed merger of two Northwest transmission planning groups has won the endorsement of state regulators, but a prominent independent transmission developer is calling on FERC to convene a technical conference to scrutinize the effort before signing off.

In a limited protest submitted to FERC on Oct. 7, LS Power says it agrees in principle with the consolidation of ColumbiaGrid and Northern Tier Transmission Group (NTTG) into a single regional planning organization (RPO) called NorthernGrid (ER19-2760, et al.). But the company also questioned whether the new entity will be any more successful than its predecessors at producing the kind of regional transmission projects envisioned by the commission’s Order 1000.

In that landmark 2011 order, FERC mandated that transmission providers participate in processes that produce a regional transmission plan and amend their tariffs to include procedures for public policy requirements. The order also sought to open projects identified in those regional plans to competition by non-incumbent transmission developers.

“To date, neither ColumbiaGrid nor NTTG have selected a single regional solution to transmission needs identified in the respective planning processes by individual transmission owners,” LS Power wrote in its filing. “While LS Power is generally supportive of the endeavor to combine the two regions, it also believes that this is an opportunity to establish a transmission planning region that engages in meaningful regional planning that leads to the identification of more efficient and cost-effective transmission solutions rather than simply rolling up local transmission plans.”

If approved by the commission, NorthernGrid’s planning territory would encompass parts of California, Idaho, Oregon, Montana, Nevada, Washington, Wyoming and the entire state of Utah. Members would include ColumbiaGrid’s Avista, Bonneville Power Administration, Chelan Public Utility District, Puget Sound Energy, Seattle City Light and Snohomish Public Utility District, along with NTTG’s Deseret Power, Idaho Power, Enbridge, NorthWestern Energy, PacifiCorp, Portland General Electric and Utah Associated Municipal Power Systems.

In line with current practice, BPA and the publicly owned utilities — all non-jurisdictional to FERC — would be considered “non-enrolled” members in the new RPO. The RPO would coordinate their planning with their investor-owned neighbors, but they would not be subject to federal authority or Order 1000.

A Plan for Planning

The proposed merger is the result of a four-year effort to replace ColumbiaGrid and NTTG, the proponents noted in their Sept. 6 filings, which requested FERC approve the new RPO effective Jan. 1, 2020.

They said the merger will allow for “collaborative” regional planning on a single timeline, reduce member expenses through broader sharing of administrative expenses and reduce the interregional coordination requirements for all Western RPOs by eliminating one region. Membership would be open to any entity that owns or operates transmission facilities in the Western Interconnection, is electrically connected to an existing member or proposes to build a project making such a connection.

NorthernGrid would follow a two-year transmission planning cycle. The process would kick off with a gathering of input on study scope, including local transmission plans, new proposed projects (including Order 1000 candidates) and public policy requirements. Later during the first year, the RPO would develop the study scope and methodology and perform technical analysis and coordination with other regions. It would complete the year by issuing a draft regional plan.

Year 2 of the cycle would start with a review of the draft plan and an update of data points, followed by an update of the regional study scope and development of cost allocation solutions. The process would wrap up later that year with a review of the final regional plan, allocation of cost responsibility for regional projects and plan approval.

‘Fundamental Issues’

LS Power contends that NorthernGrid’s planning process “raises fundamental issues about how the planning process should be structured,” pointing out that the proposed process largely draws from existing processes used by ColumbiaGrid and NTTG — one the company said has been unsuccessful for independent developers.

“To properly evaluate whether the new NorthernGrid proposal will meet the commission’s goals, the commission must look at whether the previously approved ColumbiaGrid and NTTG processes effectively met those goals,” the company said. “Although those proposals were approved as compliant with Order No. 1000, the proponents now have at least five years of data available to test the effectiveness of the regional planning.”

LS Power offered its own verdict: “To date, neither ColumbiaGrid nor NTTG have authorized a competitively determined transmission addition under their Order No. 1000 process.”

The company also contends that “aspects of the proposal show that the planning process favors local transmission planning.” It asked FERC to require NorthernGrid to engage in transmission planning that leads to the evaluation of projects that may be more efficient or cost-effective than local solutions.

LS Power said FERC should consider imposing additional requirements on NorthernGrid, including:

• giving developers and other stakeholders an opportunity to propose regional needs and solutions after NorthernGrid has finalized the study scope;
• clarifying when the region will determine whether a project proposed for regional cost allocation is a more efficient or cost-effective solution than a local project;
• revising the non-enrolled developer agreement to allow a developer to seek resolution at FERC through a complaint under Section 206 of the Federal Power Act;
• altering the governance structure to allow stakeholders to vote and ensure greater independence from incumbent transmission providers; and
• developing a pro forma agreement laying out the rights and obligations of a developer whose regional project is selected by the RPO.

LS Power also said the filing is deficient because NorthernGrid did not include a copy of its planning agreement with the non-enrolled members, such as BPA, whose transmission facilities “interconnect or are intertwined” with the systems of the RPO’s “enrolled” members.

“The NorthernGrid filers intend to coordinate planning with non-enrolled nonpublic utility transmission providers. To that end, they developed a separate planning agreement that is substantially similar to the planning that occurs within Attachment K [of a transmission provider’s tariff], but excludes the cost allocation provisions,’” LS Power said.

The company argues that FERC should hold a technical conference to evaluate how well ColumbiaGrid and NTTG have identified projects that solved their regions’ needs “and, if those entities were not successful in identifying regional projects, whether that is due to flaws in the planning process that should be corrected so that the flaws will not carry over to the new (and combined) NorthernGrid.”

“The commission should not accept the new Attachment K until these issues are better fleshed out. Commission precedent shows that a technical conference is good vehicle for fleshing out issues of this type,” the company said.

Proposal Addresses ‘Key Concern’ for States

The NorthernGrid proposal has earned the backing of a key constituency: state utility commissioners, who applauded the group for providing states with a “meaningful role” in planning through the appointment of two representatives from each state on an Enrolled Parties and States Committee.

“There, state entities and jurisdictional members may collaborate to form perspectives on the study scope and plan that the committee’s co-chairs will carry forward to the NorthernGrid planning committee,” commissioners from Idaho, Oregon, Washington and Wyoming wrote in joint comments filed with FERC.

The role of states in NorthernGrid had been a “key concern” for regulators because ColumbiaGrid had “no formal role for states distinct from other stakeholders,” while utility regulators do have formal roles on NTTG’s Steering Committee, they said.

The commissioners said they “appreciate the willingness of the NorthernGrid entities to work toward a solution that recognizes the important role of states and accommodates many state priorities, even within a complex organizational structure.” They pointed out that the footprints of the two planning regions already represent “an interconnected region with significant overlap” in customers, generation and transmission. Their combination “will better reflect the scope of the regional benefits of transmission solutions being evaluated, as well as produce administrative cost efficiencies that benefit customers across the region,” they said.

They also contend that the “best regional solutions” will depend on investor-owned utilities collaborating with BPA and the region’s publicly owned utilities.

“Navigating the legal and administrative complexity of an organizational structure that accommodates both Order 1000 entities and non-jurisdictional entities is difficult but necessary to achieve broad regional collaboration,” they wrote.

The commissioners acknowledged that their concerns were centered on NorthernGrid’s governance and that FERC must deal with many other organizational details in its review process. “Although we do not intend to take positions on any other issues that may arise, we do encourage FERC to evaluate the filing as expeditiously as possible, so that transition to the new organization can align efficiently with the beginning of the next two-year planning cycle,” they concluded.