Power Marketers Flex at FERC

Fortnightly Magazine - February 1 1995
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Electric utilities beware. Power marketers are not only here to stay, but their ranks are growing. The Federal Energy Regulatory Commission (FERC) logged approximately 100 applications in 1994, compared to nine in 1993. About half have been acted on already.

The fledgling industry is also staking out its regulatory territory. Notably, on December 14, the FERC ordered the Tennessee Valley Authority (TVA) to provide nonfirm transmission service to AES Power Inc. of Atlanta, GA, a power marketing subsidiary of AES Corp.-to accommodate AES Power's current and future bulk-power marketing transactions (Docket No. TX94-7-000). This marks the first time the FERC has granted a power marketer's request to require wheeling from a federal power agency. As a power marketer, AES Power takes title to electric power that it purchases and sells for resale, thus qualifying as a public utility under the Federal Power Act. In its filing, AES Power sought nonfirm, point-to-point transmission service under an "umbrella agreement" that would establish the rates, terms, and conditions under which AES could request specific transactions without applying under Section 211 each time. AES Power also sought assurances that it would not be charged more than other parties, including TVA itself, for comparable service. The power marketer agreed to be subject to a postage-stamp ceiling rate that gives TVA the flexibility to quote any rate up to the ceiling.

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