§824s Transmission Infrastructure Investment

Summary

The Commission must create rules no later than 1 year after August 8, 2005, to set up incentive-based rates (including performance-based ones) for public utilities that transmit electricity across state lines. The goal is to help consumers by keeping the grid reliable and lowering delivered power costs by cutting transmission congestion. The rules must encourage investment to expand, upgrade, maintain, and operate all interstate transmission facilities, offer returns that attract new investment (including related technologies), and push for technologies and other steps to increase capacity and efficiency of existing lines. They must let utilities recover reasonable costs to meet mandatory reliability rules (section 824o) and to develop transmission projects (section 824p). Utilities that join a Transmission Organization must be eligible for incentives, and recoverable costs can be collected through either the utility’s transmission rates or the Transmission Organization’s rates. All rates under these rules must still meet the fairness and reasonableness requirements in sections 824d and 824e.