FERC Order 1000

FERC Order 1000
Name	FERC Order 1000
Issued by	Federal Energy Regulatory Commission
Issued	2011
Effective	2011–2013 (phased)
Subject	Transmission planning and cost allocation
Citation	Order No. 1000

FERC Order 1000 is a rulemaking issued by the Federal Energy Regulatory Commission in 2011 that reformed regional transmission planning and cost allocation for high-voltage electricity transmission infrastructure across the United States. The Order required public utility transmission providers to adopt regional planning processes, consider non-incumbent developers, and use transparent criteria for allocating costs, influencing disputes among utilities, regulators, and stakeholders such as American Electric Power, Duke Energy, Exelon Corporation, and NextEra Energy. Its implementation intersected with litigation involving states, consumer advocates, regional entities like PJM Interconnection, Midcontinent Independent System Operator, and California Independent System Operator, shaping policy debates involving the Energy Policy Act of 2005 and national infrastructure strategy.

Background

Order 1000 emerged from proceedings at the Federal Energy Regulatory Commission that followed policy developments after the Energy Policy Act of 2005 and implementation debates linked to transmission expansion needs identified by regional transmission organizations such as PJM Interconnection, Midcontinent Independent System Operator, California Independent System Operator, New York Independent System Operator, and ISO New England. Stakeholders including investor-owned utilities like Pacific Gas and Electric Company, cooperative networks such as Basin Electric Power Cooperative, state regulators like the California Public Utilities Commission, environmental groups such as the Sierra Club, and market monitors debated reforms to replace practices rooted in precedent from earlier FERC orders and cases involving National Grid, Consolidated Edison, and Southern Company.

Key Provisions

Order 1000 required public utility transmission providers to (1) participate in regional transmission planning that produces a regional transmission plan, (2) remove federal rights of first refusal that favored incumbent transmission owners, and (3) establish transparent, non-discriminatory cost allocation methods for new transmission facilities. The rule directed entities like PJM Interconnection, MISO, CAISO, NYISO, and ISO New England to produce planning and allocation criteria that mesh with regional reliability standards enforced by North American Electric Reliability Corporation and oversight from the Federal Energy Regulatory Commission. Order 1000 also called for interregional coordination between adjacent planning regions, implicating organizations such as the Western Electricity Coordinating Council and Eastern Interconnection stakeholders.

Implementation and Compliance

Implementation required tariff revisions by transmission owners filed at the Federal Energy Regulatory Commission and coordinated changes by regional transmission organizations and independent system operators. Compliance filings involved utilities and entities like American Transmission Company, Transmission Owners, Transmission Developers, and state commissions, including contested proceedings before FERC panels chaired by commissioners appointed under administrations of Barack Obama and other presidents. The Commission reviewed compliance with metrics tied to reliability standards from the North American Electric Reliability Corporation and cost-allocation theories influenced by cases such as NSTAR Electric and decisions implicating the U.S. Court of Appeals.

Regional Transmission Planning

Order 1000 elevated the role of regional planning across zones including the Midcontinent Independent System Operator region, the PJM Interconnection footprint, and the California Independent System Operator territory. Regional plans had to identify "regional transmission facilities" and to evaluate alternatives including generation and demand-side options proposed by entities like Tesla, Inc. and renewable developers such as NextEra Energy Resources and Iberdrola USA. Planning processes engaged stakeholders including transmission owners, merchant developers, state authorities like the New Jersey Board of Public Utilities, and consumer advocates from organizations such as Public Citizen.

Competitive Transmission Development

The Order removed a federal right of first refusal for incumbent transmission owners, opening competitive solicitations to non-incumbent developers including independent transmission companies and merchant developers. This shift affected market actors such as TransCanada Corporation and AEP Transmission Company, and prompted development interest from project developers and financiers led by entities comparable to BlackRock and infrastructure funds. Competitive models required qualification criteria and bid evaluation frameworks akin to procurement processes used by utilities like Southern California Edison and transmission developers in regional solicitations.

Legal Challenges and Litigation

Order 1000 spawned litigation and rehearing requests involving utilities, state entities, and industry groups. Petitions and appeals reached federal courts including the United States Court of Appeals for the District of Columbia Circuit and involved parties such as The Edison Electric Institute, state public utility commissions, and trade associations. Litigation addressed issues including federal preemption versus state siting authority, cost allocation methodologies contested by entities representing regions such as New England and New York, and the validity of FERC's removal of rights of first refusal under statutory frameworks influenced by precedents from the Supreme Court of the United States.

Impact and Criticism

Order 1000 influenced transmission planning, spurred some interregional projects, and encouraged participation by independent developers, affecting stakeholders like renewable energy suppliers and regional utilities including Xcel Energy and Dominion Energy. Critics—including incumbent transmission owners, some state regulators, and industry associations like Edison Electric Institute—argued the rule increased regulatory complexity, raised litigation risk, and could affect investment signals for capital-intensive projects. Supporters such as consumer advocates and renewable proponents argued the Order promoted competition, transparency, and broader consideration of alternatives, aligning with policy debates involving the Clean Power Plan and federal infrastructure initiatives.

Category:United States administrative law Category:Energy regulation