FERC Order 1000 Transmission Planning and Cost Allocation FRCC Region Stakeholder Meeting March 29, 2012
Agenda • Order 1000 Compliance Process • Order 1000 Compliance Filings Timeline • Order 1000 Draft Concepts – Planning Process for Proposed Cost Effective and Efficient Regional Transmission Solutions (CEERTS) – Cost Allocation for Regional Projects • FRCC’s FERC Order 1000 Website • Wrap-up, Review of Next Steps 2
Florida Sponsors (FPL, JEA, PEF, OUC, TEC) Order 1000 Compliance Process • FERC Order 1000 will require revision of Open Access Transmission Tariffs (OATTs) – Attachment K – Transmission Planning & Cost Allocation • Florida Sponsors - group of Transmission Providers within the FRCC region who have conforming OATTs The Florida Sponsors will coordinate the process with FRCC and • stakeholders of determining the changes needed to revise their OATTs to satisfy regional planning and cost allocation requirements in Order 1000 • Order 1000, like Order 890, will require revisions to the FRCC Regional Transmission Planning process • The Order 1000 process is comparable to the stakeholder process followed for the FERC Order 890 compliance filings with review and approvals by the FRCC Planning Committee and FRCC Board of Directors 3
Order 1000 Compliance Filings • Regional Compliance Filing – Oct 11, 2012 – Regional Transmission Planning – Regional Transmission Cost Allocation – Non-incumbent Transmission Provider Provisions – Public Policy • Interregional Compliance Filing – Apr 11, 2013 – Interregional Transmission Coordination – Interregional Cost Allocation 4
Regional Compliance Filing 2012 Timeline • Q1 – Florida sponsors develop compliance concepts – March 29th FRCC Region Stakeholder meeting to review/discuss initial compliance concepts 5
Regional Compliance Filing 2012 Timeline (cont.) • Q2 – Florida sponsors continue to develop and refine compliance concepts based on stakeholder input – Florida sponsors review compliance direction with the Florida Public Service Commission – June 11 th FRCC Region Stakeholder meeting to review/discuss compliance concepts 6
Regional Compliance Filing 2012 Timeline (cont.) • Q3 – Florida sponsors develop and distribute drafts of compliance filing documents – FRCC stakeholders review/comment on draft documents – September FRCC Stakeholder meeting to review/discuss draft of final compliance documents – Modify the FRCC Regional Transmission Planning Process document as needed to incorporate compliance with Order 1000 – FRCC Board and FRCC Planning Committee review/approval of revised FRCC Regional Transmission Planning Process document – Filing sponsors review draft of final compliance filing with Florida Public Service Commission Staff 7
Regional Compliance Filing 2012 Timeline (cont.) • Q4 – Oct 11, 2012 – Regional Compliance filing submitted to FERC 8
Order 1000 Draft Concepts Areas of Focus Today • Planning Process for Proposed Cost Effective and Cost Efficient Regional Transmission Solutions (CEERTS) • Cost Allocation for Regional Projects 9
CEERTS Process Draft Concepts Start with the current FRCC Regional Plan • • A project sponsor can propose a Cost Effective and Efficient Regional Transmission Solution (CEERTS) to be considered for regional cost allocation A CEERTS project needs to meet the following criteria • – Encompass more than one TSP territory unless it has sufficient cost benefits from a regional perspective – Be at a voltage level of 230 kV or above – Cost at least $50 Million – Cover at least 15 miles and more than one county in Florida – Materially different than projects currently in the regional plan 10
CEERTS Process (cont.) Draft Concepts Information requirements for submittal of CEERTS project • – Description of transmission project, general path, interconnect points to transmission system, etc. – A load flow analysis of CEERTS with the FRCC cases demonstrating performance – Identification of transmission projects >100 kV that the CEERTS is intended to replace or affect and any other additional projects that may be required due to the proposed CEERTS project. – A cost estimate and in-service date – Identification of CEERTS transmission project benefits and how they were determined. Project benefits need to be based on displaced transmission costs. – Identification of developer, ownership, operating/maintaining entity, if known. CEERTS sponsor to present overview of project to the FRCC • Planning Committee (PC) with its rationale for why the proposed project is a more cost effective and efficient regional solution than the current regional plan projects. 11
CEERTS Process (cont.) Draft Concepts • The FRCC PC advises the FRCC Board of all CEERTS projects submittals that have fully met the requirements above • Technical analysis under direction of the FRCC PC to validate CEERTS project – Reliability performance – Eliminate/reduce constraints – Losses impact – Cost estimate of CEERTS project vs. costs of projects in regional plan that the CEERTS project is designed to replace 12
CEERTS Process (cont.) Draft Concepts If CEERTS project has sufficient regional benefits, FRCC PC will • facilitate a meeting with the sponsors and interested parties to fully discuss the technical analysis, project costs, and project benefits. This forum will enable the CEERTS project to be fully vetted by all affected parties. A CEERTS transmission developer must be identified at this point in time in order for the project to continue to be considered. – Benefit/cost determination will be based on: • Proposed project meeting a minimum of 1.25 regional benefit to cost ratio and no affected individual transmission owner incurring increased unmitigated costs (negative benefit) as a result of the CEERTS project. • CEERTS transmission cost should be lower than the cost of the transmission projects within the FRCC transmission plan that are being replaced as a result of the CEERTS project – FRCC Board will be advised of outcome of vetting process 13
CEERTS Process (cont.) Draft Concepts • Project Developer Qualifications – A non-incumbent transmission developer must meet certain qualification criteria to be eligible for CEERTS projects • Qualification criteria will require the non-incumbent transmission developer to demonstrate that it has the necessary financial capability and technical expertise to develop, construct, own, operate and maintain transmission facilities. • Qualification criteria will also require the non-incumbent transmission developer to demonstrate its ability to satisfy all applicable regulatory requirements necessary to acquire rights of way and to construct, operate, and maintain the CEERTS facilities in the applicable jurisdiction. 14
CEERTS Process (cont.) Draft Concepts • Contractual Arrangements / Responsibilities for non-incumbents – Identify who will be responsible for compliance – Identify the entity that will own, operate and maintain the facilities – Contractual arrangements would address: • NERC Standards / FERC Compliance • Transmission Provider • Balancing Authority, Reliability Coordinator and operational control of facilities arrangements • Liability for CEERTS facilities 15
Cost Allocation for Regional Projects Draft Concepts Retain the FRCC Third Party Impact cost allocation methodology • which is also included in the current OATT Attachment K Sections 9.1 – 9.3 as a special cost allocation unique to the FRCC region and not incorporated within the Order 1000 cost allocation methodology. Replace existing OATT Attachment K Section 9.4 (e.g. economic • project cost allocation) with this new Order 1000 compliant Regional Cost Allocation methodology. • New Regional Cost Allocation methodology is applicable to following categories of regional projects: – Reliability – Economic Public Policy – – Multiple Categories 16
Cost Allocation for Regional Projects – Methodology Draft Concepts • Allocate the cost of the project to the entities that benefit from the project in proportion to the benefits received – CEERTS benefits will be based on displacing transmission costs that are currently identified in the FRCC Transmission Plan – Project beneficiaries are the transmission providers within the FRCC region (in their role as transmission provider) who are benefiting from the lower cost transmission solution – CEERTS cost would be allocated in proportion to the transmission providers displaced transmission costs • Cost allocation examples follow 17
Regional Cost Allocation – Example 1 Draft Concepts Regional Reliability Project • Companies A & B are the Transmission Project Developers & Transmission Providers • Regional reliability project where Company B is the sole project beneficiary Company Company A B Example Assumptions: • Company B estimated cost to solve their reliability issue solely on their system = $100 M • Estimated cost of the CEERTS Project(s) = $80 M – Company B transmission system upgrade cost = $70 M Company A transmission system upgrade cost = $10 M – • Project beneficiaries: Company B = 100% Regional Cost Allocation: • Company B cost responsibility = $80 M 18
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