FERC’s punt of ROFR issue



While Oklahoma’s ROFR or Right of First Refusual bill stirred up a political hornet’s nest early in the legislative session, it now rests quietly in the abyss of legislative committees, hidden there because it possibly threatened the futures of some legislators.

In recent weeks however, ROFR rose again but not in the legislature. Instead, it came to light in the recent Order 1920, the landmark rule from Federal Energy Regulatory Commissioners. After spending two years to write a rule for the development of thousands of miles of transmission lines over the coming decade, FERC decided not to resurrect the “right of first refusal” that would have allowed powerful utilities the ability to refuse competitive bidding for the expensive projects in their service areas.

FERC’s encouragement to use competitive bidding on such larger projects has been in existence since 2011. However, it is the belief of some ROFR critics that by not rewriting the issue, FERC only “punted” the issue and left the ultimate decision in the hands of states, i.e. Oklahoma legislature. It’s already been proven by this year’s action at the state capitol that the issue is a red hot poker that few want to touch.

E&E News spoke with Paul Cicio, executive director of the Electricity Transmission Competition Coalition and a man who has been quoted several times here at OK Energy Today as we covered the ROFR issue in Oklahoma.

“We suspect that utilities will continue to protect their turf,” he said. ““This is giving incumbent electric utilities a blank check. Utilities have no incentive to contain costs without competition.”

Several states in the past few years have adopted laws giving ROFR power to monopoly utilities that extended their money to the campaigns of eager legislators. A similar attempt started last year in Oklahoma but it stalled until this year. Now it appears the issue has stalled again.