Michael Giberson Testimony in support of complaint at FERC in “Industrial Consumers of America et al v. Avista Corporation; Idaho Power Company et al”

SUMMARY

The purpose of my testimony is to establish that the Commission’s obligation to ensure just and reasonable rates requires all transmission facilities 100 kV and above meeting the Bulk Electric System (BES) definition to be planned exclusively through Commission-required regional planning processes.

My testimony traces the evolution of the U.S. power system from isolated local systems into today’s three vast interconnected grids. This history reveals how industry practices that were once sensible–like individual utility transmission planning–have become incompatible with operating an integrated transmission system. I discuss key regulatory developments including Order No. 888’s Seven Factor Test for determining Commission-jurisdictional transmission, and the development of NERC’s BES definition at the direction of Congress and the Commission.

This historical context establishes why a uniform 100 kV threshold for mandatory regional planning is both natural and overdue, and necessary to obtain just and reasonable rates. The testimony provides multiple examples from RTOs and non-RTO regions demonstrating how the lack of such a threshold has resulted in costly, inefficient grid development. These examples show the issues raised in the Complaint are widespread and require comprehensive reform.

I explain how billions of dollars in transmission spending now occurs through processes that do not require consideration of alternatives, exposure to competitive bidding, or evaluation for cost-effectiveness. This spending cannot produce just and reasonable rates. The testimony demonstrates that transmission owners face perverse incentives to overinvest in local projects while potentially underinvesting in more efficient regional solutions. I cite evidence of transmission owners exploiting exemptions from regional planning requirements to pursue projects that boost their rate base without demonstrating the investments serve the public interest.

The testimony also explains why an independent transmission planner is necessary to overcome these incentives and address inefficiencies in current planning processes. Even when planning occurs through Commission-recognized regional processes, transmission owners can exert undue influence through selective disclosure of critical information about generation plans, load forecasts, and asset conditions.

In conclusion, I explain why these two reforms – mandatory regional planning for facilities 100 kV and above, and independent transmission planning oversight – are necessary to achieve just and reasonable rates in today’s highly integrated transmission system. The evidence shows current practices result in poorly coordinated investments that fail to meet consumer needs cost-effectively. Reform is critically important given the hundreds of billions of dollars in transmission investment the Commission anticipates will be needed to address aging infrastructure and accommodate changing grid conditions.

See the full testimony here.

And see the full complaint here.