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New transmission lines are essential if utilities are to achieve RPS goals and serve major load centers with cost-effective, but remote, renewable resources. Load-serving utilities engage in elaborate transmission planning processes, and such utilities have the benefits (and complexities) of a rate base with which to absorb transmission investments and risks. Another form of transmission developer—the merchant transmission developer—must bear the financial burden and risk of its transmission projects without the support of retail ratepayers.
FERC has prescribed “open season” processes by which merchant transmission owners may solicit firm commitments to purchase long-term transmission service, to support the cost of new transmission lines. In February 2009, the Federal Energy Regulatory Commission's order in Chinook Power Transmission, LLC provided another means for merchant transmission developers to obtain the customer commitments they would need to finance new transmission lines. In that order, FERC determined that merchant transmission developers may contract with "anchor tenants" to improve the prospects for financing and to spread the risks associated with new transmission projects. Although the order was transformative, merchant transmission development (especially long-haul projects) continues to face hurdles.
If the anchor tenant concept is to be used effectively, generation developers and merchant transmission developers both need to understand the key impediments that merchant transmission continues to face, as well as the key challenges posed by the anchor tenant concept. This session will address FERC's past approach to merchant transmission and anchor tenant arrangements, the policies underlying FERC's decision in Chinook Power Transmission, LLC, and the obstacles that still remain in the way of significant merchant transmission development.
Who Should Attend - Renewable energy developers
- Merchant transmission developers
- Utilities
- Long-term energy planners
- Lawyers and finance professionals, particularly those involved in financing renewable generation and transmission
Learning Outcomes - Review the historical approach to merchant transmission development
- Discuss FERC's approach to anchor tenant arrangements and identify the policies underlying recent regulatory transformations
- Analyze key strategic and technical issues related to negotiating anchor tenant arrangements
Requirements for Successful Completion of Program Participants must be logged in to the web conference for its entirety to receive continuing education credit. Instructional Methods Web based PowerPoint presentation and on-line interactive question/answer session. Continuing Education Credits: EUCI is authorized by IACET to offer up to 0.1 CEUs for this program.
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