PJM, Midcontinent Independent System Operator and Southwest Power Pool have filed joint comments in response to the U.S. Department of Energy’s Notice of Intent and Request for Information regarding the proposed rules defining which eligible entities may participate in the department’s Transmission Facilitation Program.
The Department of Energy (DOE) program is aimed at spurring investment in transmission lines to help reduce greenhouse gas emissions from the electricity sector.
As part of the 2021 Infrastructure Investment and Jobs Act (IIJA), the DOE is authorized to borrow $2.5 billion from the Department of the Treasury in outstanding repayable balances at any one time in order to effectuate the goals of the IIJA, which include:
- Improving grid resilience and reliability
- Building long-distance, high-voltage, interregional transmission facilities
- Lowering electric-sector greenhouse gas emissions
- Promoting technology that enhances grid capacity, efficiency, resilience or reliability
The comments (PDF) filed by PJM, MISO and SPP (collectively referred to in the filing as the Indicated RTOs) on June 13 focused on ensuring reliability and efficiency, upholding time-tested regional transmission planning principles, and non-discriminatory bid practices when considering developer applications for federal financing tools.
The Indicated RTOs made the following points in the filing:
- Limiting initial-round applications to a capacity-contract construct would unfairly and unnecessarily exclude applicants in an RTO region, such as the PJM region, from seeking to apply for the Transmission Facilitation Program (TFP) funds via a loan or public-private partnership format.
- The public-private partnership bid model may provide the greatest flexibility for eligible projects in RTO regions.
- While the capacity-contract bid model may suit merchant transmission developers, limiting the initial solicitation to this format could potentially discriminate against all other types of transmission projects that may otherwise effectuate the goals of the IIJA.
- The capacity contract should not include a provision permitting the DOE to terminate the contract for convenience. Such a provision would insert uncertainty into the planning process, impose greater risk on developers and potentially increase costs to load.
- The initial solicitation should not be limited to applicants seeking capacity contracts for eligible projects that will commence commercial operation no later than Dec. 31, 2027. This deadline may reduce the applicant pool as those developers would likely have secured their financing by now, thereby leaving risker projects that have been unable to secure financing to take advantage of the TFP under the first solicitation.
- The DOE should put safeguards in place that ensure the TFP is implemented in its intended open, non-discriminatory manner.
PJM also separately submitted supplemental comments (PDF) describing its RTEP planning process.