​Did the Alabama PSC Lie to FERC?

Last month, the Federal Energy Regulatory Commission (FERC) issued Order 1920, a groundbreaking rule that requires more comprehensive transmission planning across the country. This rule, developed over two years, marks a significant advancement in how the bulk electric system is planned.

Throughout its development, the Alabama Public Service Commission (PSC) was outspoken in its opposition to Order 1920’s reforms. The Alabama PSC’s latest filing reiterates many of its previous arguments, and states that Order 1920 is unnecessary, claiming, “Alabama has a resource planning process that accounts for needed transmission buildout to maintain reliable service.” The Alabama PSC contends that FERC’s new rule is meddling with states’ rights and “intruding on resources selection in Alabama.”  The Commission contends that the “intrusion on resource selection is beyond FERC’s Authority”…“This includes the oversight of the [integrated resource planning] process and the associated selection of resources…”

There’s one particularly notable problem with the Alabama PSC’s assertion: Alabama’s PSC does not have an integrated resource plan process.

Referring to an IRP process, the Alabama PSC staff have stated, “The Commission has not adopted a formal standard; it has noted its ongoing knowledge of and involvement in Alabama Power’s IRP process.” Yet, even this “involvement” appears limited. According to Southern Company's 10-K filed with the SEC, “Certain of the traditional electric operating companies are required to file IRPs with their respective state PSC...”, but in Alabama, “Alabama Power provides an IRP report to the Alabama PSC.” (emphasis added) Alabama Power publishes a summary of its internal report approximately every three years, which is neither subject to approval nor review by the PSC, nor subject to any public comment or investigation. There is no docketed proceeding for Alabama Power’s IRP. There are no hearings, interventions, nor cross-examination. No expert witnesses are provided, and no parties can contest the IRP summary. While Alabama Power may have an IRP process, the PSC unambiguously does not.

The latest IRP summary developed by Alabama Power was completed in late 2022, with no docketed proceeding at the Alabama PSC to review the document. Moreover, the Alabama PSC’s Rules of Practice expressly prohibit parties and members of the public from presenting arguments or evidence during its Monthly Commission Meetings. Without such a proceeding, and the corresponding opportunity for public participation and due process, Alabama Power effectively self-regulates its resource planning. Even if the PSC tacitly approves of Alabama Power’s self-regulation, the IRPs developed by the company are highly unreliable. For example, the 2022 summary indicates an addition of solar power only in the year 2041, showing a mere 570 megawatts of solar 20 years into the future. However, just a few months after the 2022 IRP was released, Alabama Power released a request for proposals for up to 2,000 megawatts of solar power, undercutting the IRP summary analysis provided.

While generation planning and the siting and approval of transmission is reserved for the states, requirements for transmission planning fall under FERC’s jurisdiction under the Federal Power Act. The Alabama PSC’s complaint to FERC places a lot of weight on the Southeastern Regional Transmission Planning (SERTP) process, stating, “Transmission planning in Alabama (and in the SERTP process) already achieves many, if not most, of the goals in the Final Rule.” Alabama Power’s 2022 IRP summary briefly mentions the SERTP process with a copied description from previous dockets, lacking details on specific transmission plans or any comprehensive transmission planning process. But contrary to the Alabama PSC’s claims, the SERTP process has never resulted in any regional or interregional transmission construction across the geographic area it covers. Notably, no Alabama Public Service Commissioner has ever attended a SERTP meeting to date.

FERC is aware of the Alabama PSC’s inconsistencies. In the final rule for Order 1920, FERC notes, “In response to Alabama Commission’s arguments that the…proposed rules have the potential to encroach on state-jurisdictional integrated resource planning and resource procurement processes overseen by Alabama Commission, SREA contends that Alabama Commission in fact does not have a formal integrated resource planning process upon which the [FERC] could encroach.”

The states are still in charge under Order 1920. As noted in Order No. 1920, “states and other jurisdictional regulations will continue to have ultimate control over generation resource planning…regardless of what a regional transmission body proposes.” FERC Order 1920 does not make or otherwise mandate any state decision regarding generation planning or intrastate transmission planning. As further explained by FERC, “We disagree with certain commenters’ assertions that this final rule favors, promotes, or subsidizes particular types of generation resources over others, or otherwise engages in generation planning.”  The Alabama PSC’s allegation that FERC Order No. 1920 is putting a “thumb on the scale” of resource planning Alabama via its regulation of Long-Range Transmission Facilities is misplaced.

Alabama’s data gaps minimize the effectiveness of neighboring states to improve their systems and protect their ratepayers. Consequently, Florida, Georgia, Mississippi, and Tennessee’s transmission planning processes (to the extent they exist) cannot compensate for Alabama's deficiencies. Order 1920 is designed to fill the gaps created by only considering state-by-state transmission planning.  
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While there may be reasonable arguments for improving Order 1920, let’s not pretend that Alabama has an IRP process that would alleviate the need for grid planning reform. 

Simon Mahan is the Executive Director of the Southern Renewable Energy Association.