A report released by Federal Energy Regulatory Commission staff on Oct. 6 updated the results of metrics developed in 2016 for evaluating whether the agency's existing transmission policies are stimulating the construction of needed new transmission lines.
Of particular significance, the report found that 47% of all proposals submitted in four of the five transmission planning regions that have held competitive transmission development processes since the implementation of Order 1000 were from nonincumbent transmission developers.
Noting that it was able to evaluate only fewer than half of the 12 planning regions, staff nevertheless appeared to see reason for optimism even while acknowledging that the results may not end up being representative of future proposal windows.
"Staff concludes that in those transmission planning regions that have held competitive proposal windows, nonincumbent participation has generally been robust," the report, "2017 Transmission Metrics," said.
Of the six FERC-approved regional transmission operators and independent system operators, the ISO New England has not yet held a competitive transmission solicitation. And although the Southwest Power Pool was among the five that have done so, that grid operator made determining participation of nonincumbent transmission developers difficult because it masked the identities of the transmission developers that submitted proposals.
Turning to the remaining four ISOs/RTOs, staff found that 46% of the competitive proposals submitted to the PJM Interconnection between 2013 and 2016 were tendered by nonincumbents; proposals from nonincumbents in that planning region outnumbered those from incumbents in 2013 and 2015, but the reverse was true in 2014 and 2016.
In the New York ISO, which has held only two solicitation windows so far, proposals by nonincumbents outnumbered those by incumbents 58% to 42% in 2015, but the situation flipped in 2016 when incumbents tendered 56% of the proposals received by that grid operator. The California ISO did not hold any competitive solicitations in 2016, but nonincumbents submitted more proposals than incumbents in each of the previous three years. In the Midcontinent ISO's first solicitation, which was held in 2016, 73% of the proposals were submitted by nonincumbents.
Staff included several new metrics in its 2017 report, such as the number of unique developers submitting proposals. PJM received a relatively high number of proposals each year but those proposals came from a comparatively low number of individual developers. For instance, in 2014 and 2015, that grid operator received an average of 13.8 and 11.6 proposals per participating developer, respectively, while each of the 11 proposals submitted to MISO in 2016 came from a unique developer.
As for the breakdown of proposals accepted by the five grid operators that have held competitive solicitations — yet another new metric developed by staff for the 2017 report — the percentage of selected proposals submitted by nonincumbents for all the transmission planning regions declined abruptly from 20% in 2013 to 6% in 2014, and then down to 3% in 2015 and to none in 2016. Staff warned, though, that drawing conclusions from the available data is difficult given the limited number of solicitations that have been held and proposals that have been selected.
CAISO appears to be selecting more nonincumbent proposals over time — all of those it selected in 2013 were from incumbents while all were from nonincumbents two years later. But while one of three proposals PJM selected as a result of its 2013 proposal windows was from a nonincumbent, all of the proposals it selected in the following three years were from incumbents. And SPP and MISO each selected only incumbent proposals as a result of their sole proposal windows thus far.
A third new metric, designed to reflect stakeholder participation in regional transmission planning process, showed that attendance at planning meetings during fiscal years 2015 and 2016 was relatively stable in RTO and non-RTO regions alike. "An encouraging finding is that ... nonincumbents are participating in stakeholder meetings, with staff finding increases in nonincumbents' levels of participation in four of the twelve transmission planning regions," staff said.
Looking at a metric designed to indicate whether appropriate levels of transmission infrastructure exist, staff found that relatively high or low real-time locational marginal prices occurred persistently at 1,482 generators or load points since 2015, down from 1,986 points in last year's report. While persistent price differentials can indicate insufficient transmission investment, staff warned that "additional investment in transmission infrastructure to reduce those differences may not be economic in all cases."
The final three staff metrics are meant to indicate whether transmission investment is both sufficient and cost-effective, and staff found that the results of those metrics "did not change significantly from the 2016 report."
Load-weighted transmission investment averaged $2.43/MWh of retail load for all regions between 2008 and 2015, up from $2.19/MWh between 2008 and 2014 as detailed in the 2016 report, staff said. Figures for the load-weighted circuit miles added remained unchanged from the previous year's report. As for the last metric, the report explained that the average load-weighted circuit miles per million dollars of investment decreased slightly between the 2016 and 2017 reports.