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"Comparability" Breeds Contention

Fortnightly Magazine - March 1 1995

and making a contract to buy a four-bedroom house and suddenly you're about to wind up with a three-bedroom house." He notes that CSW's merger agreement imposes consideration of whether an existing governmental order has a "material adverse effect on the value of the asset." King observes that a large load loss without adequate compensation would be such a material adverse effect.

Meanwhile, King argues that SPS's real objective is to serve the Las Cruces load. King explains that SPS has only two means of transmission access to the West. One is the 200-megawatt Eddie County tie (em EPE owns two-thirds, and Texas-New Mexico Power Co. owns the other third. SPS currently uses the tie to sell power to EPE, but King questions whether SPS can reserve enough capacity on the Eddie County tie to serve Las Cruces, or whether the utility would have to pay for the expense of that facility. King says that the heart of the matter involves comparability (em whether SPS/Las Cruces should have the same rights to use the Eddy County tie as EPE does.

Whatever the outcome of the proceedings (em an initial FERC decision is due March 24 (em the result is sure to set precedent. Comparability has become the touchstone for open-access transmission as well as merger completion. t

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