Sue Sheridan, president and chief counsel of the Coalition for Fair Transmission Policy, sits down with host Chuck Conconi to discuss electric transmission policy and FERC Order 1000.
Chuck Conconi: Welcome to Focus Washington. I’m Chuck Conconi. My special guest today is Sue Sheridan, who is the president and chief counsel of the Coalition for Fair Transmission Policy. Sue, thank you for coming today.
Sue Sheridan: Chuck, thank you for having me.
Chuck Conconi: I’m glad to have you. I want you to tell me a little bit more about your coalition. How was it formed and why?
Sue Sheridan: Well, we formed in 2010 because we were concerned about steps that were being taken in both Congress and at the Federal Energy Regulatory Commission or FERC, that we were concerned would impose the cost of new transmission lines on consumers who didn’t benefit from the new lines.
We are a diverse group; we range from the Midwest out in Michigan to the Atlantic Coast and down to the Southeast and up to New York.
Chuck Conconi: But we need to build more transmission. I mean we always hear about, I don’t know if you hear anymore about the danger of major blackouts, but we need to have a transmission policy and develop renewable energy, don’t we?
Sue Sheridan: Yes, that’s true and EEI, that’s the Edison Electric Institute, released some figures earlier this year indicating that there’s as much as a 40 percent increase in transmission planning and development by 2014 over the 2010 numbers. So we think there’s a lot of transmission being built. Certainly, our members are involved in that.
With respect to renewable energy, we also are very supportive of it, but we’re interested in our consumers getting the cheapest renewable policy, and what we’re not interested in and what we don’t support is either regulatory or legislative changes that would subsidize long distance transmission when there may be cheaper renewables available closer to home.
Chuck Conconi: Well, we have to check with some of the points here. Much of the coalition’s focus is on the Federal Energy Regulatory Commission’s recent Order 1000. What’s your view on that order?
Sue Sheridan: Well, Order 1000 tackled two big topics—transmission planning and how to allocate the cost of new transmission. On planning, we differ with the commission in that we favor bottom-up planning. The planning for where transmission should be built and how much should be built must start at the local and state level, with the people who are closest to consumers.
And on cost allocation we’re very concerned, because it seemed like FERC is willing to socialize the cost of transmission very broadly. In short, we’re worried that some of our consumers will be tagged with transmission costs that they don’t get any benefit from. And in particular, Chuck, there was a decision affecting the Michigan area and the Midwest Independent System Operator that we read as sort of tea leaves for how FERC will implement its new Order 1000. And we are very much concerned with the MISO order.
Chuck Conconi: So Order 1000 won’t accomplish its goals?
Sue Sheridan: Order 1000 sounds good; we think the rhetoric doesn’t meet the reality. We agree with and we’re glad to see that FERC said in Order 1000 that it thought that costs imposed on consumers should be roughly commensurate with benefits. That’s a line from a court case that’s pending in the 7th Circuit. But when we take a closer look, it’s such a broad way of defining benefits that there’s no guarantee that consumers won’t end up paying for something they don’t use.
Chuck Conconi: Tell me a little bit more about what you started to say on Michigan, before I interrupted you. Why’s that a problem?
Sue Sheridan: Well that was something in the Midwest ISO case; it was a decision that came out of FERC, an order earlier this year, where FERC found that a lot of new transmission would benefit everyone in Michigan and the Midwest in general. You know that that’s a hard hit area and just coming out of the recession, and from what we can tell about 20 percent of the cost of all these “beneficial” lines, as FERC put it, will be borne by Michigan consumers even though they won’t use any of the lines for their own consumption.
Chuck Conconi: So they won’t benefit. Now you were talking about the Federal Energy Regulatory Commission’s MISO decision, correct?
Sue Sheridan: Yes, that’s the one.
Chuck Conconi: It sounds like you have major concerns with Order 1000 and we just talked about it.
Sue Sheridan: We do. And I should say we’re not involved directly in the MISO case, but we’ve been looking at that case as well as some pending court cases where FERC’s involved, sort of as looking at the tea leaves, again, to see whether FERC’s rhetoric trying to make sure that costs are commensurate with benefits really plays out. There’s no definition of the word benefit in Order 1000 and that’s what gives us concern.
Chuck Conconi: Well do you think, I mean this being an election year coming up; do you expect Congress to do anything?
Sue Sheridan: Well we’re encouraged there seems to be a good deal of interest in Congress. In the Senate, Senator Corker of Tennessee and Senator Wyden of Oregon co-sponsored a bill along with several other co-sponsors to make sure the costs that FERC assigns for new transmission lines produce measureable savings or benefits to the consumers that are served. On the Senate side that’s been very encouraging.
On the House side in October, there was a hearing in the Energy and Commerce Subcommittee on Energy and Power, where these issues were looked at and we understand there may be more attention in the coming year. Of course, trying to legislate, as you know Chuck, is very difficult to do at anytime.
Chuck Conconi: Especially this year.
Sue Sheridan: Especially this year. But it’s the type of year, where there can be a real focus on what the commission is doing and what our concerns are for the future.
Chuck Conconi: Sue, thank you so much. We’re running out of time here, but I hope you can come back and see us from time to time and keep us updated on the issue.
Sue Sheridan: Well thank you so much for having me, I enjoyed it.
Chuck Conconi: I’m Chuck Conconi, this has been Focus Washington.