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Mexican Dispute Could Involve FERC

Fortnightly Magazine - January 15 1997

Salt River Project (SRP) says it may ask the Federal Energy Regulatory Commission (FERC) to resolve a dispute with El Paso Electric Co. regarding electric transmission access to Mexico, including the question of whether FERC Order 888 should apply to foreign energy sales.

The dispute concerns how much power El Paso Electric will agree to wheel to Mexico for SRP, which had won the right on November 7 to provide 200 megawatts (mWs) of power to the City of Juarez, Mexico, on condition that within ten days it could gain transmission access to the Mexican Comision Federal de Electricidad (CFE). Relations then broke down.

El Paso Electric claims that SRP, by its own admission, failed to take into account all transmission constraints and all costs associated with ancillary services needed to comply with its bid to Juarez and the CFE.

But Charlie Duckworth, SRP's Manager of Planning, claims that on November 18, El Paso Electric "withdrew its most recent proposal from consideration, and took a position that included conditions [that] El Paso and SRP had previously agreed were unacceptable to both companies, and which could not have been reasonably achieved with the applicable time constraint."

Meanwhile, El Paso Electric does not believe that Order 888 applies to foreign energy sales, but has agreed to provide transmission service to the winning bidder consistent with Order 888 and to submit all disputes to the FERC.

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