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Electric Industry Issues Forum: Reliability, Transmission and COmpetition

Fortnightly Magazine - June 1 1997

any way.

"I would see there wouldn't be any ISO-NERC disputes because the ISOs and NERC have very congruent goals and objectives. ... The disagreements would come from one participant that said, 'Why did you cut my transmission and not the other guy's?' Neither NERC nor the ISO should be in a position to care.

"In New England ... we have reached agreement with the regulators and with the other participants and expect FERC to be approving the independent ISO. We think an independent ISO with an independent board is extremely important in the assurance of reliability because if we had a 'sector board,' we'd have some people that wanted reliability, some people that wanted economy, some people that wanted maximum utilization.

"We have been charged with looking at the long-term grid and determining when there are shortages. We have also been charged with looking at the market for any undue market power and determining what mitigation needs will be necessary if there's too much market power. I think with those two charges, we will be able to at least raise a flag when problems are occurring.

"Nobody has yet given anybody the authority to demand somebody to building transmission. The feeling is we have agreed to go to an open marketplace and as long as people are alerted to the fact there will be transmission shortages, then the marketplace should be allowed to supply those."

Tagging Electrons.

"I don't believe there's too much room for market power abuse because the ISOs have been set up for reliability and as long as the ISO can't play in the game then there should be no reason why they would make the wrong call on that.

"Tagging the contracts is extremely difficult to do. But it really is required because my operators just don't know who to shut off. Right now, when there's power flowing, we've already had a few minor problems determining how to get ahold of somebody to back off generation or contract which is causing the problem.

"Yes I think tagging is necessary, and boy, it's going to be one very big job."

The key issue is ...

"getting the rules right the first time and empowering an Independent, with a capital 'I,' operator to enforce those rules without excessive, after-the-fact litigation."

Response from: Elizabeth A. Moler is chair of the Federal Energy Regulatory Commission and, at press time, a Clinton nominee as deputy secretary of energy. Before being appointed to the FERC in 1988, she was senior counsel to the U.S. Senate Energy and Natural Resources Committee. (She notes that her comments are personal and do not represent statements or opinions of FERC policy.)

Sanctions First?

"I believe that compliance with NERC reliability criteria should be mandatory on the industry. I believe participation in the NERC governing board should be much broader than it has been historically. I am very pleased that at long last, NERC has recently come to the conclusion that compliance should be mandatory. They have skirted that issue for years. However, at this juncture they have