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Comparability: Lost in the Clouds

Fortnightly Magazine - May 15 1995

development transactions with the same systems that the holding company does?" The answer is that holding company system agreements usually require their operating companies to give a preference to transactions with other operating companies in the same holding company. Indeed, these agreements may even require a participating company to obtain permission from all other operating companies before dealing with a third party on a coordinated development. In any event, a network tariff can prohibit system transmission use for third-party sales.

In many cases, geographical or topological uses by the transmission owner and third-party transmission customers will be the same as their functional use. But where the two categories of uses are not equivalent, the FERC's three excellent goals of comparable use, comparable cost, and comparable lack of impediments will not be achieved. Comparing uses in categories of network and point-to-point operation will not allow fair comparisons of comparability on the basis of economics. For mitigating economic power, one must turn to the functional categories of uses, those that

drive the economics of a power system. t

Wallace Edward Brand practices law at his own firm in Washington, DC, where he represents small electric systems. Previously, he worked as a trial attorney at the Federal Power Commission and in the Justice Department's antitrust division.

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