July 1, 2001
L.A. Loves a Loophole
There's no getting around it...
Wisconsin "Comparable" Network Service Moves to FERC
The Federal Energy Regulatory Commission (FERC) has reviewed network transmission tariffs filed by Wisconsin Public Service Corp. (WPS) and Wisconsin Electric Power Co. (WEPCO) in compliance with a Wisconsin Public Service Commission (PSC) order requiring a FERC tariff that provides network service comparable to the service the utilities reserve for themselves. The case arose out of applications filed at the PSC by four utilities in late 1990 and early 1991. The utilities sought approval to build new electric transmission facilities and rebuild existing facilities in central Wisconsin.
WPS says its tariff reflects its intention to provide comparable network transmission service. Because it uses the transmission system to integrate its own generation resources with its loads, it is willing to provide network transmission service to others to integrate their resources and loads. But WPS is not willing to extend network service to companies that have other uses in mind (em such as power marketers or entities not entitled to transmission service under section 212(g) and (h) of the Federal Power Act (Docket No. ER94-1639-0002). The Wisconsin PSC filed a protest, arguing that the WPS tariff does not meet the FERC's comparability requirements. The PSC also argued that the tariff does not comply with its own order, because it only applies to captive customers and discriminates against other system users.
The FERC ordered an administrative law judge to hold hearings on the comparability issues. It said the basic comparability requirement need not be addressed; rather, the hearing should specify the terms and conditions of transmission service that are the same or comparable to the service WPS provides to itself, and the costs of providing such service.
In the second proceeding, WEPCO proposed a network tariff to serve customers who do not purchase wholesale power from the Wisconsin Public Power Inc. system (WPPI) (Docket No. ER95-264-00).
Wisconsin Municipal Intervenors (WMI) protested that the tariff would exclude WPPI members, and fails the comparability test because WEPCO would not assure access to flexible point-to-point service. WMI asked the FERC to require WEPCO, WPS, and Wisconsin Power and Light Co. to file a single, joint transmission tariff with a single rate for transmission rather than three separate rates to three utilities. WMI noted that Wisconsin's transmission system is planned and operated on an integrated basis, without regard to ownership, and that the three utilities do not charge each other for transmission service. WEPCO had proposed a separate network tariff applicable to WPPI members for new services effective November 1, 1996, when the existing transmission agreement rate moratorium expires (Docket No. ER94-1625-000). However, WMI protested that it wanted network service immediately, and noted that it would pay lower rates under the network agreement.
The FERC disagreed, finding that WPPI agreed to the rates and moratorium. It refused to excuse WPPI from the terms of the moratorium, and said it would be up to the administrative law judge to determine whether the transmission services proposed by WEPCO should be expanded to include nondiscriminatory point-to-point transmission services in order to meet the comparability standard. The FERC also found "unacceptable" WEPCO's proposal