FERC Order 1000 (2011) — Transmission Planning and Cost Allocation

Order No. 1000, issued in July 2011 in Docket RM10-23-000, established comprehensive requirements for regional and interregional transmission planning and cost allocation, marking a landmark shift in how the U.S. power grid is expanded. FERC found that piecemeal, utility-by-utility planning failed to identify cost-effective regional solutions and that incumbent transmission owners often held exclusive rights to build new facilities, foreclosing competitive development even when regional plans identified more efficient projects.

The order required all transmission providers to participate in an open regional planning process that considers economic, reliability, and public policy transmission needs—not just immediate reliability needs addressed in individual utility plans. Planning regions must use recognized planning criteria, evaluate alternative solutions, and document how proposed projects address identified needs. Stakeholders including load-serving entities, generators, and state regulators participate in the process, improving transparency and accountability.

Critically, Order 1000 eliminated the federal right of first refusal for incumbent transmission owners to build new transmission facilities selected in the regional plan, opening multi-billion dollar projects to competitive development. FERC determined that removing ROFR would encourage more efficient and innovative project execution while maintaining regional oversight of which facilities are built. The order also required neighboring transmission planning regions to coordinate on interregional needs, ensuring that major infrastructure decisions account for cross-regional benefits and costs.

On cost allocation, Order 1000 required that costs of regional and interregional projects be allocated to beneficiaries in proportion to the benefits they receive, using methods determined through the regional planning process. Follow-on orders 1000-A and 1000-B addressed rehearing requests and clarified compliance obligations. Order 1000 remains the governing framework for transmission expansion planning alongside later initiatives such as Order 1920's long-term planning requirements.

Order 1000 required planning regions to use consistent methodologies for identifying transmission needs driven by reliability standards, economic congestion, and state or federal public policies accepted by the region. Selected projects must have regional cost support before construction, and regions must explain why alternatives such as non-transmission solutions were not chosen. The order also addressed participant funding of new facilities and the relationship between regional plans and interconnection-driven upgrades, setting expectations that proactive planning should reduce piecemeal expansion. Implementation unfolded through compliance filings across multiple planning regions, with rehearing orders clarifying how ROFR removal applies to different project selection processes.

The order's cost allocation reforms aimed to prevent free-riding by beneficiaries outside a planning region while avoiding cost shifts to customers who receive no measurable benefit from selected projects. FERC retained oversight of regional methodologies to ensure they are roughly commensurate with benefits received, making Order 1000 the governing template for beneficiary-pays transmission expansion that Order 1920 later extended to longer horizons.