FERC’s ROE incentive adder policy sends the wrong signals.
Scott H. Strauss and Jeffrey A. Schwarz
FERC is offering incentive rates to entice transmission investment. But the authors identify serious flaws in emerging policy regarding return on equity (ROE) incentive adders. Determining whether and when ROE adders are appropriate requires a more deliberative approach.
FERC attempts to reform competitive markets.
Richard Stavros, Executive Editor
The fact that FERC actually released an advance notice of proposed rulemaking in late June, on competitive markets of all subjects, has many in disbelief.
Eco-Developer Pat Wood III explains how competitive markets are good for green business.
The debate over implementing comprehensive electric-competition policies throughout the U.S. economy still rages to this day. Pat Wood III, as the federal regulator, had to fight many tough, public battles in defense of his beliefs on open markets. But there is no bitterness from those battles, if there ever was. It’s quite the opposite. Interviewed at the American Wind Energy Association conference in early June, Wood punctuated his answers in the go get ’em, optimistic view of the world many remember him for at FERC.
A new twist on an old doctrine.
Stephen L. Teichler and Ilia Levitine
The D.C. Circuit once observed that the Mobile-Sierra doctrine is “refreshingly simple.” In fact, however, the doctrine has become incredibly nuanced and complex over time. In two concurrently issued decisions, the court has discovered new prerequisites to the initial application of the doctrine, changed the independent “public interest” review standard into a presumption, and has jettisoned that presumption entirely when contract prices are too high as opposed to too low.
Progress has been made, but much work remains along the path to ERO completion.
FERC demonstrated strong leadership in meeting the aggressive timeline set by Congress for establishing the regulatory basis on which the Electric Reliability Organization will be created. But next summer’s peak-demand season is fast approaching. And much more work remains ahead for the industry to finish the job.
Sweeping revisions to Order 888 are needed before true wholesale competition can take place.
Richard Stavros, Executive Editor
There’s been a lot of talk in the industry about new super powers for market enforcement, conferred by Congress on FERC in last year’s energy legislation. But this hasn’t been the case entirely. Many believe that FERC still labors at a disadvantage.
The jurisdictional battle over authorizing rejection of wholesale power contracts continues.
The high stakes turf battle over whether FERC or the federal bankruptcy courts have jurisdiction over rejecting wholesale power contracts is now in its third round. Round one was fought in 2003 in the NRG bankruptcy case and ended in a settlement among the parties. Round two followed with the Mirant Chapter 11 case. Now punches and counterpunches are flying in round three: the Calpine bankruptcy.
The nation’s first energy “top cop” and his colleague discuss important compliance implications of EPACT 2005.
By William F. Hederman Jr. and George D. Billinson
In its March 2005 report to the House Energy and Commerce Committee, the Federal Energy Regulatory Commission (FERC) repeated its request for enhanced civil penalty authority. When Congress passed the Energy Policy Act of 2005 (EPACT), it granted FERC all the authority that it had requested, and more. The new director of FERC’s Office of Market Oversight and Investigations (OMOI) called the new penalty authority “awesome.”1
The North American Electric Reliability Council should be promptly certified as America’s electric reliability organization.
To create the strong electric reliability system envisioned by Congress, FERC needs to focus on many issues, two of which are especially important: creating consistency in how compliance and enforcement programs are carried out at the regional level, and leading the transition—effectively and promptly—from today’s world to the new era called for in EPACT.
How will the commission answer Congress’ call for energy market transparency?
How will the Federal Energy Regulatory Commission answer Congress’ call for energy market transparency? Will it rest on its laurels, or move forward to restore confidence in wholesale energy markets?