IT TAKES LABOR, FUEL, OPERATING CASH AND INVESTMENT capital to produce and deliver electric power. Which utilities have managed to use these resources optimally to produce and sell kilowatt-hours...
Speaking on June 11 in Washington, D.C., at a symposium sponsored by the Institute of Electrical and Electronics Engineers, Rep. dan Schaefer (R-Colo.) was heard to say that he would have his electric restructuring bill out of committee by the end of July. He said his bill would mandate electric competition by 2000--just the sort of deadline that Texas Public Utility Commission Chair Robert Gee likes to call a "Hong Kong" clause.
Will the millennium bring the dawn of customer choice? Here we are, halfway through 1997. Hong Kong is now Chinese, but in America we are still ratepayers. Maybe what Schaefer really meant was that Congress might possibly get around to passing a bill by 2000.
Still Serving Drinks?
On and off for the last six months, we have been covering the issue of electric system reliability. Specifically, we've been tracking the efforts by the North American Electric Reliability Council to reinvent itself by imposing mandatory compliance with NERC rules and policies in place of the old collegial atmosphere, which relied on a close-knit cadre of hard-working utility engineers and a dash of peer pressure to stir the pot.
Simply put, if NERC ensures reliability, who watches over NERC?
At the IEEE meeting, I stumbled upon a wonderful presentation by a group of three experts who all had something to say. The group included Kevin Kelly, deputy director of the Federal Energy Regulatory Commission's Office of Electric Power Regulation; David Meyer, electricity team leader at the Office of Policy and International Affairs of the U.S. Department of Energy, and Ray Maliszewski, chair of NERC's engineering committee (also senior v.p. of systems planning for American Electric Power, and primary author of the technical report on the West Coast electric outages of last summer).
Kelly: "Who should set reliability rules? Who should enforce those rules?
"NERC has acknowledged a need for review ... for a government backstop. However, it's unclear what the FERC can do to enforce reliability. Our authority is unclear. It's not explicit."
Maliszewski: "This morning we heard Congressman Dan Schaefer say that NERC is a private organization ... and ... at NERC we want to remain a self-regulated, industry organization."
Kelly: "In most private organizations, a failure to obey rules offers grounds for expulsion. But that doesn't work with NERC, because you want everyone who is involved in the [electricity] market to be a member of NERC."
Maliszewski: "NERC has attempted to design some penalties regarding control-area performance. NERC has implied that it will bar any party [that violates NERC rules] from selling ancillary services. But how will NERC be able to enforce that penalty?"
Kelly: "At the FERC, on an informal basis, we have received requests and concerns from power marketers and transmission-dependent utilities to interpret whether a NERC rule or policy represents a 'tariff, term or condition' of transmission service and, if so, whether we can review that rule or policy under our statutory authority to regulate transmission.
"We haven't said that, but the issue is before us.
"For instance, the pro forma tariffs in Order 888 say