Non-discriminatory access to the nation's transmission system is crucial for facilitating competition in wholesale electric markets, and ultimately reducing the cost of providing electricity. Historically, public utilities owned and operated the transmission lines used to transport the energy they produced or purchased from other generators. Over the last 30 years, however, many federal and state rulemakings have worked towards deregulating the electric wholesale market, divesting public utilities of much of their generating facilities and making transmission facilities accessible to other energy market participants. Deregulation allowed a greater number of generators and retail electricity providers to enter into the market, thus enhancing competition.
In 1996, to promote and enhance such access, the FERC issued Order No. 888 containing the pro-forma Open Access Transmission Tariff (OATT). The OATT required that transmission owners provide open, non-discriminatory access on their transmission system to transmission customers. Independent transmission providers such as Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs) were permitted to vary from the required pro forma service if the variations were demonstrated to be equally or more conducive to the tariff’s objective.
Following on the adoption of the 2005 Energy Policy Act, FERC initiated a rulemaking in order to implement needed revisions to the OATT and to correct any loopholes and shortcomings in FERC’s previous orders. This rulemaking process culminated in the issuance of FERC’s Order No. 890 in December of 2007. Order No. 890 is the latest step in the evolution of allowing non-transmission owners, including competitors, fair access to transmission. Order No. 890 provides greater specificity to reduce opportunities for undue discrimination and facilitate the FERC's enforcement. It also established a set of rules in order to make the planning and use of the nation's transmission system more open and transparent.
The CPUC’s Position
The CPUC filed initial, reply and supplemental comments throughout FERC’s proceedings leading up to the adoption of Order No. 890. The CPUC supported open, transparent, and proactive transmission planning linked to resource (generation and demand management) planning, but also noted progress in this area across the western electric interconnection.
The CPUC additionally supported more open and flexible forms of transmission access beyond conventional FERC-mandated firm and non-firm services, noting that deficiencies in this area lay mainly with non-independent transmission providers (e.g., those that operate their own transmission systems as well as own generation and serve retail customers).
The final Order No. 890 stipulates nine transmission planning principles to be addressed by transmission tariff reforms that transmission providers were required to file with FERC by December, 2007. The California Independent System Operator, while more advanced in open, transparent planning than non-independent transmission providers, conducted a stakeholder process culminating in tariff amendments providing for a reformed, structured and open transmission planning process. The CPUC participated extensively in CAISO’s stakeholder process and supported its final tariff amendments.