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Electric Industry Issues Forum: Reliability, Transmission and COmpetition

Fortnightly Magazine - June 1 1997

a hundred different questions that will have to be answered."

Tagging Electrons.

"I'm aware of [the proposal], but I haven't studied it in any great detail and I don't have an opinion on it."

The key issue is ...

"everyone playing by the same rules."

Response from: Erle Nye is president and CEO of Texas Utilities Co. He serves on the U.S. Department of Energy's Electric System Reliability Task Force and is vice chair of the North American Electric Reliability Council.

Sanctions First?

"I don't believe my information and the knowledge I have of this whole matter ... suggests that the mood of marketers is growing worse or more contentious. ... There are obviously concerns that all the elements of the new industry have about, 'How is this going to work?' I think marketers, naturally, have that concern. I think independent power producers have it.

"I think if NERC is to garner the support of a large percentage of the industry, as a self-policing agency, then I don't think you can afford to predicate that on any element of the industry being substantially at odds. That is to say, I think everybody's interest has to be served.

"I think the question is poorly drafted. I donÆt think there is demonstrated proof that power marketers as a broad group are growing upset with NERC. I think they have valid concerns.

"NERC has to move to a posture where it has the support by virtue of its processes and its results of a vast majority of the industry. If it does not get there, it will not be successful.

"The question becomes how do you enforce those broadly supported elements against those few who do not agree with NERC standards? And I think there you're going to see the opportunity for a whole series of industry compacts--and I think that's a pattern that's developed in other comparable industry situations.

"For those who don't comply, well, if you have industry

compacts which call for inserting these provisions into contracts and making them part of the traditional commercial elements ... then you have the basis for compliance as you do with the stock exchange.

"Now when someone does not comply with the stock exchange rules, the only recourse is to a governmental agency and to some governmental sanction."

Backseat Driver?

"I don't think it is likely that a new institution will crop up to replace NERC. Either you will have a new and improved NERC or it's much more likely you will have a governmental process."

Who Moves the Juice?

"Our best hope is to take the processes and the standards that have been developed over the years, by engineers for the most part, and try to modify the governance and the procedures such that everyone is fairly treated. And I think that's what delivers a reliable system. And I think we have to be particularly thoughtful about not impeding the market. It is going to be more complex, but I don't think it's going to be impossible."

ISOs vs. NERC.

"To the extent that a