FERC Dismisses Petition Seeking Order Than Non-Wired Interstate Transmission Of Electricity (Such As Rail Transport Of Electric Storage) Is Within FERC's Jurisdiction

Texas PUC Had Opposed Petition As Threatening To Subject ERCOT To FERC Regulation

August 23, 2019

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Reporting by Paul Ring • ring@energychoicematters.com

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FERC has dismissed a petition for a declaratory order from Alternative Transmission Inc. (ATI), which had sought a finding that the non-wired transport of electricity is within FERC's jurisdiction under the FPA

FERC dismissed the petition as premature, noting that ATI’s petition provides only a hypothetical example of the proposed alternative transmission facilities and services and does not include a detailed description of the function and operation of the specific facilities that ATI claims would provide jurisdictional transmission service. Furthermore, ATI has neither identified the specific transmission planning region where it wishes to participate, nor a specific transmission need identified as a result of a regional transmission planning process, FERC said

Alternative Transmission Inc. (ATI) had requested a Commission fining that: (1) the facilities and services described in ATI’s Petition provide "transmission of electric energy in interstate commerce" subject to the Commission’s jurisdiction under the Federal Power Act (FPA) and (2) ATI, as the owner and operator of the facilities, will be a "public utility" under section 201(e) of the FPA.

ATI proposes to own and operate facilities that it asserts will transmit electric energy in interstate commerce without the use of transmission wires or wire corridors into areas accessible by surface transportation (and possibly water or air), where: (1) current or forecasted demand for delivered electric energy cannot adequately be met by existing wire transmission corridors, or (2) it is the most timely or economical solution for meeting existing or forecasted demand

ATI’s Petition involves construction of what it calls electric energy transfer stations (i.e., charging and discharging stations) at locations in the continental United States. ATI states that electric energy generated by unaffiliated entities will be used at the charging stations to charge an electrolyte solution in a flow battery, and that solution will be transferred to a mobile medium, which will then be transported (by rail, tractor-trailer, boat, airplane, or any combination thereof) across state lines to discharging stations at different locations. At the discharging station, the electrolyte solution in the containers will be transferred into a different battery and made available for instantaneous dispatch as instructed, until the charge is depleted, and the electrolyte solution becomes available for recharge.

ATI provides an example of its proposed technology. ATI states that it could attach 100 container cars to a locomotive engine at or near a charging station, where electricity generated by an unaffiliated generation source would be transferred to the medium in the container car. Each car would then contain a charge of electric energy, and the locomotive would transport the cars on existing rail across state lines to a discharging station, where the container cars would park and connect to an electrical load (e.g., an electric distribution system or end users). ATI states that, once the charge of each car has been delivered to load at the discharging station, ATI would deliver new charged cars and re-attach to a locomotive the depleted cars for a return trip to the original or different stations for recharging.

The Texas PUC had said in comments on the petition that, "Alternative Transmission’s requested declaratory order would raise serious issues about the jurisdictional status quo between Texas’s ERCOT grid and utilities and the [FERC] Commission."

The Texas PUC had said, "If the Commission [FERC] were to declare that ATI is transmitting electric energy in interstate commerce, and the company were to build and operate the transfer stations within ERCOT, and also build such stations in other parts of Texas outside ERCOT and/or in other states, the ERCOT grid as a whole might be deemed to contain electric energy transmitted in interstate commerce without the protection of a Commission order under Sections 210 and 211 of the Federal Power Act. This could arguably subject ERCOT, and utilities operating in ERCOT, to new Commission regulation as 'public utilities' under FPA Section 201(e), contrary to the Commission’s longstanding jurisdictional divide involving ERCOT. 16 U.S.C. § 201(e)."

The Texas PUC had said, "The PUCT agrees with other commenters that ATI’s proposed facilities and services do not involve the transmission of electric energy in interstate commerce over which the Commission has jurisdiction. For this reason, in and of itself, the Petition should be denied."

"[B]y ATI’s own description, this proposal does not represent the transportation of electric energy necessary for Commission jurisdiction over its transmission in interstate commerce under Section 201 of the Federal Power Act. 16 U.S.C. § 824(b)(1). The energy to be transported is not electric energy, but energy held in the chemical bonds in an electrolyte solution," the Texas PUC had said

The Texas PUC had said, "Though the transportation of batteries across state lines is not new or unusual, ATI’s request for a declaration from the Commission that its proposal represents the transmission of electric energy in interstate commerce under the Federal Power Act is unusual. Indeed, a petition for a declaratory order is not the proper means to address the myriad issues associated with this request. For the Commission to appropriately address them, much more information would be required. The Commission should be provided with more information on the specifics of ATI’s proposal. Certainly, much more is needed than what little is included in a one-page description in the Petition and a few paragraphs in a single supporting affidavit. Expert testimony on the technical, legal and policy implications of ATI’s proposal would be necessary and appropriate."

The Texas PUC had said, "ATI’s proposal for transporting a 'charged mobile medium' by train or other means of transportation, as described in the Petition, does not represent the 'transmission of electric energy' that could justify the declaration of Commission jurisdiction that ATI seeks. The PUCT urges the Commission to deny ATI’s petition, and further confirm that petitioner’s proposed facilities and services, if implemented, would not alter the jurisdictional status quo between Texas, ERCOT, and the Commission."

Docket No. EL19-69-000

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