Commissioner John R. Norris Statement July 19, 2012 Docket Nos. AD12-9-000 and AD11-11-000 Item No. E-4

Policy Reforms on Capacity Allocation for Merchant Transmission Projects

"The issues surrounding merchant transmission and participant funded transmission projects have been building for some time. I am pleased we are taking action today to propose a more streamlined policy that should provide greater opportunity for the development of the transmission lines and generation projects that many are seeking to build and that will be needed to meet our future energy needs. In the end, I believe that the new policies we propose here will help provide diversity in our electricity supply and increase competition through competitively-priced generation, while maintaining the extremely important principle of open access.

I view this proposed policy as a supplement to Order No. 1000. I expect that the difficult work of complying with Order No. 1000 will lead to regional planning processes that identify cost-effective and efficient solutions to most transmission needs, and fairly allocate the costs of projects selected in those plans. Regardless, there may be transmission projects that are not selected in those processes that still have a customer or group of customers willing to make a long-term commitment to aid their construction. This proposed policy statement provides a roadmap for those projects to move forward while ensuring just and reasonable rates and non-discriminatory open access.

One concern I have had and continue to have is what former Wyoming Governor Friedenthal best described as the “spaghetti lines” dilemma. I recognize there is a limit to how many transmission lines can be built, and as a result, it is important that we maximize the utilization of land displaced by the construction of transmission lines.

I believe we have addressed that issue in part in this proposed policy statement through the proposed requirements for greater transparency, especially the proposed provisions addressing oversubscription and the requirement that transmission developers provide a rationale for not increasing capacity when a project is oversubscribed. I will be paying close attention to comments on these issues because, as I mentioned, my concern is that we build these new lines right the first time, because we all know how hard they are to build and how difficult it will be to build additional lines in the same area."