FERC Denies Request for Rehearing on PG&E's Asset Management projects

On October 1, 2018, in EL17-45, the California Public Utilities Commission, the Northern California Power Agency (NCPA), the City and County of San Francisco, the State Water Contractors, and the Transmission Agency of Northern California (collectively, Complainants) filed a request for rehearing of the Commission’s August 31, 2018 order denying the Complaint filed in this proceeding against PG&E on February 2, 2017.  The Complaint alleged that PG&E is in violation of its obligation under Order No. 890 to conduct an open, coordinated, and transparent transmission planning process because more than 80 percent of PG&E’s transmission planning is done on an internal basis without opportunity for stakeholder input or review.  In the Order on Complaint, the Commission found that the Complainants had not shown that PG&E’s transmission owner tariff is unjust, unreasonable, unduly discriminatory, or unduly preferential because it does not require the asset management projects and activities in question to go through an Order No. 890-compliant transmission planning process (Order on Complaint, 164 FERC ¶ 61,161 at P 65).  On September 19, 2019, FERC denied rehearing because the Complainants did not show that PG&E’s asset management projects and activities fall within the scope of Order No. 890’s transmission planning reforms or that failing to include these projects and activities within the Order No. 890 transmission planning reforms results in undue discrimination, violates EPAct 2005 requirements, or is inconsistent with Commission precedent.
FERC denied the Complaint in its initial Order on Complaint, finding that the Order No. 890 transmission planning reforms were intended to address concerns regarding undue discrimination in grid expansion, and to the extent that PG&E asset management projects do not expand the grid, they do not fall within the scope of those reforms.  FERC found that the transmission-related maintenance and compliance projects, which it referred to as “asset management projects,” at issue in this proceeding do not, as a general matter, expand the CAISO grid.  Instead, asset management projects include maintenance, repair, and replacement work, as well as infrastructure security, system reliability, and automation projects that PG&E undertakes to maintain its existing electric transmission system and to meet regulatory compliance requirements.  However, the Commission acknowledged that to the extent that an asset management project will result in a non-incidental, or incremental, increase in transmission capacity, the incremental portion of the asset management project would be subject to the transmission planning requirements of Order No. 890 and would have to be submitted for consideration in CAISO’s TPP.  FERC also noted that while the projects and activities at issue in this proceeding are not subject to the transmission planning requirements of Order No. 890, Complainants, other stakeholders, and PG&E are all likely to benefit from increased transparency into asset management projects.  FERC strongly encouraged PG&E to continue its efforts to work with Complainants and other stakeholders to develop a process to share and review information with interested parties regarding asset management projects that are not considered through the TPP.