FERC Accepts Changes to ISO-NE’s Competitive Transmission Solicitation Process

On December 10, 2019 FERC accepted ISO New England Inc.’s (“ISO-NE”) proposed revisions to its Tariff to enhance the competitive transmission solicitation process and make additional improvements to ISO-NE’s transmission planning process (“Transmission Planning Improvements”). ISO-NE’s proposal was joined by New England Power Pool Participants Committee and the Participating Transmission Owners Administrative Committee (collectively, “Filing Parties”). The Filing Parties’ Transmission Planning Improvements went into effect on December 10, 2019.

Filing Parties stated that ISO-NE is preparing to issue the region’s first competitive transmission solicitation in December 2019 via a Request for Proposals (“RFP”), which will seek transmission solutions to the non-time sensitive needs expressed in ISO-NE’s 2028 Boston Needs Assessment (BNA) Update and BNA Addendum (collectively, “Assessment”). According to the Filing Parties, the Assessment identified myriad transmission facility overloads under peak load conditions and identified system restoration concerns with the underground cable system in the Boston area.

Filing Parties explain that their proposed revisions would improve the competitive transmission process by: (1) clarifying the applicable procedures; (2) increasing the type of information included in responses to the competitive transmission process; (3) providing more detail on the evaluation criteria that ISO-NE will consider when it evaluates responses to the competitive transmission solicitation process; and (4) clarifying that ISO-NE may cancel a transmission RFP during the competitive transmission solicitation process.

Filing Parties specifically proposed, for example, to revise Sections 4.3(a) (Initiating the Competitive Solution Process) and 4A.6(a) (Information Required for Stage One Proposals) of Attachment K of the Tariff to provide that a Qualified Transmission Project Sponsor (“QTPS”) may submit a comprehensive transmission solution for Reliability Transmission Upgrades or Market Efficiency Transmission Upgrades that includes an upgrade on a Participating Transmission Owner’s system when the QTPS is not the Participating Transmission Owner for the upgrade. Additionally, Filing Parties proposed revisions to Sections 4.3(c) and 4A.6(a) of Attachment K of the Tariff that would require Phase One and Stage One Proposals to include: (1) a description of the interconnection to the existing transmission system, (2) installed costs, (3) a description of the project’s financing, and (4) any cost containment measures.

Filing Parties also proposed a new pro forma agreement—the Selected Qualified Transmission Project Sponsor Agreement (“SQTPSA”)—between ISO-NE and the selected QTPS to help determine the design and construction of the new transmission solution. Filing Parties also proposed a revised definition of Localized Costs to reflect the competitive transmission process and to update the process to account for asset condition and reconstruction projects. According to the Filing Parties, such revisions are necessary to ensure the selected projects protect QTPS from exposure to significant risks. Finally, the Filing Parties proposed a new subsection to Tariff provisions administering modeling assumptions to determine the network model, which reflects the in-service date of a transmission project set forth in a SQTPSA for ISO-NE’s Forward Capacity Market model.

Several intervenors intervened in the proceeding, including, New England Energy Connection, LLC (“NEEC”); New England States Committee on Electricity; New Hampshire Transmission, LLC; Avangrid Networks, Inc.; and the Attorneys General of Massachusetts and Connecticut. In a protest, the Connecticut Attorney General William Tong argued that while he generally supported the proposed revisions, the proposed Transmission Planning Improvements are inadequate to ensure truly competitive transmission procurements in the New England region and do not comply with Order No. 1000. The Connecticut and Massachusetts AGs requested that the Commission consider how Non-Transmission Alternatives (“NTAs”), such as battery storage units and transmission line ratings, can more meaningfully compete in ISO-NE. Likewise, NEEC asked the Commission to encourage ISO-NE to establish a process to help stakeholders address broader issues in the competitive solicitation process after the 2019 RFP.

The Commission accepted the Filing Parties’ Transmission planning improvements, in part because the Filing Parties showed that the proposed revisions are just and reasonable and will improve the competitive transmission solicitation process in ISO-NE. FERC also found that the Connecticut AG’s protest and Massachusetts AG’s comments related to NTA participation in ISO-NE’s competitive transmission solicitation process and the role of NTAs in regional transmission processes generally were outside the scope of this proceeding. Finally, FERC explained that, while it found NEEC’s request to establish a stakeholder process to be outside the scope of the proceeding, it noted that ISO-NE expressed plans to hold stakeholder discussions after the 2019 RFP to consider modifications to the competitive solicitation process.

FERC’s order is available here.