On April 10, the Federal Energy Regulatory Commission approved a request for various transmission infrastructure investment incentives submitted by Green Power Express LP (GPE), a transmission-only partnership that proposes to build a 765 kV "green superhighway" consisting of three interconnected loops in North and South Dakota, Minnesota, and Iowa.  GPE’s proposal will also extend radially into Wisconsin, Illinois, and Indiana, making use of existing substations in some locations and constructing high voltage substations in others.  In total, the project will include approximately 3,000 miles of transmission lines that reach 12,000 MW of wind and stored energy.  GPE estimates the project’s cost at $10-12 billion and hopes the project will be in service in 2020.

FERC’s approved the following (non-exhaustive) key incentives that reduce GPE’s exposure to risk in moving the project forward.

Abandoned Plant.  FERC granted GPE’s request to recover prudently incurred expenses if the project is abandoned for reasons outside of GPE’s control.  FERC stated that the recovery of abadonment costs is a means for encouraging transmission development, reducing the risk that GPE’s investors may lose their entire investment. 

Regulatory Asset.  FERC will allow GPE to create initial and subsequent vintage regulatory assets in order to defer pre-construction, development, and start-up costs until GPE has customers from which it may later recover those costs.  Such cost deferral will also help GPE attract financiers.

Construction Work in Progress.  FERC approved GPE’s request to include 100 percent of construction work in progress in its revenue requirement, allowing GPE to service its debt and reduce borrowing over the project’s development–something that would otherwise be difficult for a $10-12 billion project with a 2020 in-service date.

The incentives granted to GPE, as well as other recent changes to FERC’s transmission policies, show that the agency is becoming increasingly serious about spurring transmission development forward.  If we are to reach the 62 GW of wind currently in the Midwest ISO interconnection queue, as well as other renewable resources elsewhere, transmission developers will need creative regulatory solutions to help attract financiers and gain firm commitments from generation developers.  FERC continues to take positive steps forward.

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Photo of Jason Johns Jason Johns

Jason Johns advises independent power producers, utilities, investors, and large users of gas and power resources with matters arising in power markets and state and federal energy regulatory arenas. Jason appears regularly in proceedings before the Federal Energy Regulatory Commission and in negotiations…

Jason Johns advises independent power producers, utilities, investors, and large users of gas and power resources with matters arising in power markets and state and federal energy regulatory arenas. Jason appears regularly in proceedings before the Federal Energy Regulatory Commission and in negotiations at the ISO/RTO level, where he represents independent power developers and utilities. His experience includes negotiating major facility contracts, such as interconnection, transmission, and power purchase agreements; prosecuting disputes at FERC; and counseling and defending clients on issues related to regulatory compliance.

Jason also works closely with large commercial and industrial users of electricity and gas, such as aerospace companies, pulp and paper mills, steel mills, and tech company data centers. In that role, Jason helps clients negotiate power and gas supply contracts, interstate pipeline capacity asset management agreements, and pipeline bypass agreements. Jason has also assisted these clients with demand management agreements, the installation of on-site resources (such as battery storage, fuel cells, and solar PV), and with retail and wholesale power purchase agreements for renewable energy and other resources. Jason also serves as a board member of The Climate Trust, a national leader in carbon offset projects and innovative climate change solutions.

Jason and his wife are parents to two growing boys, and they live just outside of Portland, Oregon.

Click here for Jason John’s full bio.