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FERC Order 1000 could drive utilities to work smarter, not harder

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Attempts by the U.S. government (like FERC Order 1000) to create a more balanced, unified electric grid will create questions as well as collaboration among utilities and startups alike, according to Roy M. Palk, senior energy advisor for LeClairRyan law firm and former President and CEO of East Kentucky Power Cooperative.

At a recent transmission event, Palk described Order 1000 as the latest in a series of important steps toward creating a truly national energy-transmission grid along the lines of the Interstate Highway System.

"The intent of Order 1000 is to enable this process to come to fruition by creating an even playing field for transmission planning, construction and utilization, such that no single power resource ever holds another hostage," Palk told TransForum East attendees. "FERC wants to promote regional and interregional coordination as never before [and] strongly encourages non-jurisdictional entities, whether a startup focused on renewable energy or a municipal electric group, to explain how they aim to fit into the evolving grid."

The three primary components of the Order deal with transmission planning; cost-allocation reforms (i.e., who picks up the cost of energy transmission and under what circumstances); and the overall interplay of regulated power generators and movers.

The benefits of Order 1000 will likely include creating stronger incentives for older utilities to work smarter not harder.

"Increased competition will ramp up the focus on economics," Palk said. "Incumbent transmission owners will have to sharpen their pencils to make sure they can build transmission as cheaply as an independent can."

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