FERC Issues Order Regarding Transmission Planning And Cost Allocation

On July 21, 2011, the Federal Energy Regulatory Commission ("FERC" or the "Commission") issued a final rule ("Order No. 1000" or the "Order") amending transmission planning and cost allocation rules affecting public utility transmission providers. As explained below, while Order No. 1000 builds upon principles established in Order No. 890 (Preventing Undue Discrimination and Preference in Transmission Service) it also departs from them in several respects. By directly addressing controversial topics such as interregional cost allocation, the federal right of first refusal ("ROFR") and public policy considerations in transmission planning, Order No. 1000 is sure to spark continued debate in the ensuing months. The newly imposed rules are significant but largely process-driven, and thus, the true extent of the Order's impact will be revealed in the responsive compliance filings.