17.20.1304 ELECTRIC TRANSMISSION LINES, EVALUATION OF ALTERNATIVES (1)  An application must contain an evaluation of the nature and economics of relevant alternatives to the proposed facility, which could in whole or in part address the problem or opportunity as described in ARM 17.20.920 that the proposed facility is designed to address, including transmission alternatives, alternative energy resources, alternative transmission technologies, alternative levels of reliability, and nonconstruction alternatives.  The no action alternative must be evaluated.  The evaluation must also include a comparison of alternatives leading to the selection of a preferred alternative and an explanation of the reasons for the selection of the proposed facility.

(2)  An application for an electric transmission line must include an evaluation of transmission alternatives, including alternative end points and intermediate substation locations for the transmission line and upgrading or replacing an existing facility that would serve to provide the needed reinforcement that would be provided by the proposed facility.  An application must may also evaluate alternative timing of other electric transmission lines planned by the applicant, which in whole or in part would address the problem situation or opportunity or provide the needed reinforcement that would be provided by the proposed facility.  For each transmission alternative, a minimum of three load flow studies must be provided, as required by ARM 17.20.922.

(3) and (4) remain the same.

(5)  An application based on reliability of service considerations must contain an evaluation of alternative levels of transmission reliability, and of the provision of backup generation to customers with articular needs for reliability.

(6) and (7) remain the same, but are renumbered (5) and (6).

REASON: The proposed changes in (1) remove the reference to ARM 17.20.920.  The proposed text change from "must" to "may" in (2) would account for the fact not all applicants have other electric transmission lines planned.  In (2), the existing regulated wholesale market of energy utilities were typically vertically integrated utilities, meaning that these utilities were solely responsible for generating, transmitting, and distributing energy to their customers. The proposed deletion of text in (2) is the removal of the reference to ARM 17.20.922.  The proposed deletion of (5) is being done as it is a direct reference to ARM 17.20.923.

17.20.1505 ENERGY GENERATION AND CONVERSION FACILITIES, DECOMMISSIONING METHODS (1) remains the same.

REASON:  The proposed change updates the implementing statute for this rule. The statute was repealed in 1997. 

17.20.1604 LINEAR FACILITIES, PUBLIC INTEREST, CONVENIENCE AND NECESSITY STANDARD  (1) In order for the The department to must find that a proposed facility will serve the public interest, convenience and necessity as required by 75-20-301, MCA, the department must find and determine that the discounted net present value of benefits (less costs) is greater for the facility than for any other reasonable alternative, based on a determination of the following:

(f) any other factors the board department considers relevant.

17.20.1606 ELECTRIC TRANSMISSION LINES LINEAR FACILITIES, NEED STANDARD (1) In order to find that there is a need for an electric transmission facility To establish the basis of need, as required by 75-20-301, MCA, the department must find that the services of the facility are needed by finding and determining and determine at least one of the following:

(a) For facilities for which insufficient power transfer capacity at adequate voltage levels under normal operating conditions is a stated basis of need in the application, either that:

(i) the transfer capacity of the proposed facility will be required within two years of the date the proposed facility is to be placed in service; or

(ii) if the finding in (1)(a)(i) cannot be met, that the expected benefits of constructing a transmission line with the transfer capacity of the proposed line, instead of a line for which the finding in (1)(a)(i) can be met, warrant the costs based on a finding and determination of the following:

(A) the expected benefits of building the proposed line compared with a line that would satisfy (1)(a)(i) ; and

(B) the extra costs of building the proposed line compared with a line that would satisfy (1)(a)(i) .

(b) For facilities for which insufficient power transfer capacity at adequate voltage levels under contingent operating conditions is a stated basis of need in the application, that:

(i) there is or will be a power transfer capacity shortage under contingent conditions that will be rectified by the proposed facility within two years of the date the proposed facility is to be placed in service; and

(ii) the contingent conditions under which existing transfer capacity is insufficient, are sufficiently likely to occur to give a reasonable assurance that the expected benefits of the proposed facility exceed the costs of the facility.

(c) For facilities for which transient stability under normal operating conditions is a stated basis of need in the application, that there is or will be a transient stability problem under normal operating conditions, that will be rectified by the proposed facility within two years after the date the proposed facility is to be placed in service.

(d) For facilities for which transient stability under contingent operating conditions is a stated basis of need in the application, that:

(i) there is or will be a transient stability problem under contingent operating conditions that will be rectified by the proposed facility within two years of the date the proposed facility is to be placed in service; and

(ii) the contingent conditions under which the transient stability problems arise are sufficiently likely to occur to give a reasonable assurance that the expected benefits of the proposed facility exceed the costs.

(e) For facilities for which excessive voltage drop under normal operating conditions is a stated basis of need in the application, that:

(i) there is, or will be within two years after the proposed facility is to be placed in service, an excessive voltage drop that will be rectified by the proposed facility; and

(ii) the applicable design or operating voltage drop criteria used to justify the proposed facility are reasonably likely to result in benefits in excess of costs.

(f) For facilities for which excessive voltage drop under contingent operating conditions is a stated basis of need, that:

(i) there is or will be within two years after the proposed facility is to be placed in service a problem of excessive voltage drop under contingent operating conditions which will be rectified by the proposed facility; and

(ii) the applicable design or operating voltage drop criteria and the expected frequency and duration of the contingent operating conditions under which the problem exists are such as to give a reasonable assurance that the expected benefits of the proposed facility exceed the costs of the facility.

(g) For facilities for which reliability of service is a stated basis of need in the application:

(i) that the reliability criteria of the applicant will be violated within two years of the date the proposed facility is to be placed in service if the proposed facility is not built or some other solution is not implemented; and

(ii) that the value of the savings from reduced outage plus any value for general reliability of service, over the life of the facility, is reasonably likely to exceed the cost of the proposed facility.

(h) For facilities for which economy considerations are a stated basis of need:

(i) that the expected benefits of the proposed facility exceed the costs of the facility, given:

(A) the difference between expected system costs with and without the line;

(B)  the expected location and size of markets and price for surplus power; and

(C)  the expected source, quantity and price of purchased economy energy; and

(ii) that the benefits of the line warrant the resource commitment associated with it given the degree of uncertainty surrounding the benefits, likely markets, and economy purchases identified in (1)(h)(i) ; and

(iii) if transmission capacity exists that could carry the desired energy power flow without violating voltage drop, transfer capacity or other transmission planning criteria, that:

(A) the existing capacity is not available to the applicant at reasonable cost;

(B) the applicant has made every reasonable effort to reach agreement with the owners of the existing capacity;

(C) no agreement has been reached with the owners of the existing capacity; and

(D) no means exist for reaching a reasonable agreement with the owners of the existing capacity or for otherwise gaining access at reasonable terms to the existing capacity.

(i) For all facilities, that any forecast of loads is consistent with available information about loads and load growth in the area to be served by the proposed facility.

(a) the facility is a connecting link based on an explanation of how this facility would augment the existing system;

(b)  the facility has been designated as a "common carrier" under 69-13-101, MCA;

(c) the facility has been identified to relieve a constraint or capacity issue between an energy resource, generation project, market or load center.  The constraint or capacity issue(s) are based on existing, projected load or generation;

(d) the facility would resolve system reliability or stability issues; 

(e) the facility would fulfill a requirement or recommendation of a federal, state, local, or other governmental regulatory body, or is recommended through an independent system operator or regional transmission organization planning process or objective;

(f) the facility is necessary to correct an existing or potential safety hazard;

(g) the facility is necessary to correct existing deficiencies to the existing network and explain how the facility would improve the existing network;

(h) the facility has been identified in economic studies to reduce total costs to ratepayers or customers; or

(i) the facility would provide firm energy transfer capacity in a path that currently does not exist.

REASON: Inserting "linear" into the title in place of "electric transmission lines" makes it consistent with the rest of the MFSA rule titles as the term "linear facilities" is used throughout the rules.  The change ensures that the rule applies not only to transmission lines but also pipelines, which are another type of linear facility under MFSA.

The proposed rule also updates an outdated standard of need required to obtain an MFSA certificate of compliance.  The existing rule was written at a time when a regulated wholesale market of energy utilities were typically vertically integrated utilities, meaning that these utilities were solely responsible for generating, transmitting, and distributing energy to their customers.  The proposed rule and its updated definition of need accounts for other types of transmission operators–like merchant transmission line operators–that may not be subject to cost of service regulations or have an obligation to provide service to end use rate payers, which are factors of analysis implicated by the existing rule.

The proposed rule, additionally, is reflective of decisions from the Federal Energy Regulatory Commission (FERC) that allow for the wholesale energy market to be expanded beyond vertically integrated energy utilities for the building of linear energy projects.  The proposed rule, furthermore, is consistent with the 2023 Montana Legislature's amendment of 75-20-301(1)(a), MCA, see 2023 Mont. Laws Ch. 451, to strike the public interest, convenience, and necessity standard, previously required in approving an MFSA facility, and instead use the public interest standard.

17.20.1607 LINEAR FACILITIES, MINIMUM IMPACT STANDARD 

(1) remains the same.

(2) The department must condition its approval of a facility on the following standards:

(a) through (c) remain the same.

Repealing these rules, additionally, is reflective of decisions from the Federal Energy Regulatory Commission (FERC) that allow for the wholesale energy market to be expanded beyond vertically integrated energy utilities for the building of linear energy projects.  Furthermore, the proposed repeals are consistent with the 2023 Montana Legislature's amendment of 75-20-301(1)(a), MCA, see 2023 Mont. Laws Ch. 451, to strike the public interest, convenience, and necessity standard, previously required in approving a MFSA facility, and instead use the public interest standard.

17.20.818 LINEAR FACILITIES, EVALUATION OF ECONOMIC COSTS AND BENEFITS

17.20.920 ELECTRIC TRANSMISSION LINES, EXPLANATION OF NEED

17.20.921 ELECTRIC TRANSMISSION LINES, TRANSIENT STABILITY CONSIDERATIONS

17.20.922 ELECTRIC TRANSMISSION LINES, POWER TRANSFER CAPACITY, VOLTAGE DROP

      17.20.923 ELECTRIC TRANSMISSION LINES, RELIABILITY OF SERVICE

17.20.928 OTHER LINEAR FACILITIES, EXPLANATION OF NEED