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Frontlines

Fortnightly Magazine - July 1 1997

that any unloading of lines in case of system emergency must not be discriminatory. But NERC could impose its own rules on whose line is unloaded first. A conflict could arise here."

Maliszewski: "At NERC, we have asked the FERC and DOE for guidance here. But I wonder, if you're a passenger on an airline, should the flight attendant worry about still serving drinks to everyone who's ordered a cocktail, even as the plane is going down?"

Meyer: "Speaking for myself, and not for the DOE, I feel we can be sure that there will be a reliability title in the federal legislation.

"We've crossed a threshold here. I can't conceive of the Congress laboring over a bill without giving attention to reliability. But that doesn't mean that it will be different than what we have already."

If that conversation doesn't make any sense, consider what I learned when I posed a similar question to FERC Chair Elizabeth Moler back in January at a hotel luncheon. Would the FERC take any action if the NERC were to adopt a reliability standard that would appear to violate the open-access goals of Order 888, or discriminate in some way, such as against transmission-dependent electric utilities? At the time, she politely dodged the question. She noted only the authority to review NERC's activities lay in the first instance with the Department of Energy.

But knowing I was a magazine editor, and knowing that her comments would probably end up in print, Moler added a caveat, leaving the door open for at least some involvement at the FERC.

"Our lawyers are very clever," said Moler, with a gleam in her eye.

Sleeping Well at Night

That it should prove easier for China to repatriate a century-old colony that for America to dismantle a century-old monopoly and still keep the lights on should come as no surprise. Despite the logic inherent in forcing electric utilities to unbundle generation from transmission and distribution, the regulators still haven't figured out how to make it work.

Deregulating generation appears relatively easy. But short of duplicating facilities (which nobody wants) and abandoning rate regulation (which nobody wants) and abandoning rate regulation (which nobody seems to believe is possible), how can regulators extract the kind of efficiencies and savings from T&D to make unbundling worthwhile when customer choice arrives at century's end?

In the natural gas industry, where the FERC claims great savings by having forced the pipelines to unbundle commodity sales from transportation, some fear that the savings have reached a dead end, even before we've had the chance to introduce choice at the burnertip.

Thomas Schneider, Ph.D., executive scientist in strategic research and development at the Electric Power Research Institute, feels that much of the cost savings in gas prices can be attributed not to regulatory unbundling, but from new gas production techniques, including directional drilling and better seismic surveys. His conclusion? The FERC's regulatory initiatives (contract reform, allocating take-or-pay costs, etc.) simply cleared the decks to allow those savings to reach the market.

Similarly, Richard Tabors, Ph.D., the electric