By Rich Heidorn Jr.

WASHINGTON, DC (Feb. 21, 2013) — Duke Energy may be the biggest utility in the U.S., but the Federal Energy Regulatory Commission says it still needs a date to the Order 1000 ball. Could it be PJM?

FERC Chairman Jon Wellinghoff floated that suggestion today after the commission rejected Duke’s attempt to comply with Order 1000 through a transmission planning region covering only Duke, newly acquired Progress Energy and 21 miles of transmission connecting them to Alcoa Power Generating’s Yadkin hydroelectric plant (ER13-83-000).

In 2005, Duke and Progress formed the North Carolina Transmission Planning Collaborative (NCTPC) to comply with FERC Order 890, the predecessor to Order 1000. The July 2012 merger with Progress made Duke the nation’s largest electric utility holding company. Duke argued that its new territory — larger than that of some Regional Transmission Organizations and including parts of North Carolina, South Carolina, Indiana, Ohio, Kentucky and Florida — made it sufficiently large to meet Order 1000’s requirements as a transmission planning region.

But the commission said the size of the region, and the fact that Duke and Progress are treated separately by North Carolina regulators, was irrelevant. “The notion that a compliant transmission planning region can be comprised of two `transmission providers’ that report to the same senior management, board of directors, and shareholders runs counter to Order No. 1000’s requirement that transmission planning occur on a regional rather than on an individual utility level, and would undermine the very reforms the Commission intended to achieve in Order No. 1000,” the order said.

The order, which requires Duke to file a new compliance plan within 90 days, did not suggest where the company might look for regional planning partners who would meet FERC requirements.  In a press conference after the ruling, however, Wellinghoff suggested Duke could look to PJM, along with Southern Company and utilities in South Carolina. “I think there’s plenty of opportunities for them,” Wellinghoff said.

Duke spokesman Dave Scanzoni declined to comment on how the company will respond to FERC’s rebuff.

PJM spokeswoman Paula DuPont-Kidd also declined to comment on the impact of the ruling but added: “Generally, we would welcome the opportunity to enhance our operating and planning efficiencies with any of our neighbors in the Eastern Interconnection.” Separately, PJM is working on development of an interregional planning process with the Midwest ISO and New York ISO with a compliance filing due April 11.

Although six Duke affiliates are members of PJM, and the company trades with the PJM region, the company seems more likely to look to its southern neighbors, which like North Carolina, do not have retail choice or organized wholesale markets.  In its compliance filing, Duke said it could join only the Southeastern Regional Transmission Planning Process (SERTP) or the South Carolina Regional Transmission Planning Process (SCRTP).

Still, Duke and PJM have increased their collaboration over the last several years. PJM and Duke Energy Carolinas have operated under a reliability coordination agreement and a locational interface pricing agreement since 2007. On January 1, 2012, the Duke Energy Ohio/Kentucky region joined the PJM footprint. Independent Market Monitor Joseph Bowring said last fall that PJM should terminate and perhaps renegotiate the 2005 Joint Operating Agreement it signed with Progress Energy Carolinas because the way the Progress generation fleet is dispatched has changed as a result of the Duke-Progress merger.

The Duke order, and a second ruling exempting Maine Public Service Company (ER13-85-000) from the regional planning requirements, were the commission’s first decisions on compliance filings resulting from Order 1000, which seeks to spur new transmission and open competition to independent transmission developers. The commission waived the planning requirements for the small Maine utility because it is connected to the U.S. electric grid only indirectly through Canada.