The Ohio Public Utilities Commission (PUC) has proposed regulations to allow electric utilities to use fuel-cost clauses to recover gains or losses from trading Clean Air Act emission allowances....
QUESTION: WHAT DO JOHN ANDERSON (ELCON),
Karl Stahlkopf (EPRI) and Matthew Holden (former commissioner at the FERC) have in common that may affect the course of electric restructuring?
Answer: Each belongs to Phil Sharp's task force on electric system reliability, and each embodies a different set of needs and aspirations, making it quite unlikely that we'll see agreement any time soon on what Congress or the Clinton Administration should do to reform the system.
Former Energy Secretary Hazel O'Leary announced the Task Force on Electric System Reliability last year. Led by former U.S. Sen. Phil Sharp (who steered the Energy Policy Act to final passage back in 1992), the task force exists to advise the DOE on how to maintain reliability in a more competitive electric industry. Today the jury is still out on whether the task force will come to anything.
The DOE asked Phil Sharp to examine reliability in three dimensions: technical, institutional and policy issues. That three-way charge now inhibits progress.
When I left the sixth meeting of the task force, which ran for six hours on Nov. 6 in Washington, D.C., I came away with the impression that the members had inadvertently formed three factions, each with its own agenda.
Technocrats, Advocates and Wonks
First come the technocrats. Think of them as preservationists. They include experts in transmission and distribution technology, such as Stahlkopf (Ph.D., engineering and vice president of the power delivery group at the electric Power Research Institute), and Jose Manuel Delgado (M.S., electric engineering and director of electric system operations at Wisconsin Electric).
Then come the advocates. Playing the role of radical agitators, they include icons such as John A. Anderson, executive director of the Electricity Consumers Resource Council, and Ralph Cavanagh, co-director of the energy program at the Natural Resources Defense Council.
Anderson wants Congress to legislate an SRRO, a self-regulating reliability organization, cast in the mold of the National Association of Securities Dealers, with oversight from the Federal Energy Regulatory Commission. Cavanagh recognizes that reliability involves resource planning. He wants to ensure that whoever makes decisions on transmission line upgrades will also consider "softer" alternatives such as renewable energy or demand-side management.
Last come the policy wonks. Led by pragmatists, such as task force Chairman Philip R. Sharp and Matthew Holden Jr., they urge the group to bow to political realities. Sharp thinks he knows what Congress will buy. Holden fears what Congress might do and has more faith in the FERC.
These three groups have turned the process into a debate on whether the task force should:
Replace NERC with an SRRO?
Take a position on ISOs?
Cater to Canada or Mexico (both are tied to the grid)
or make rules for U.S. only?
Urge a separate bill, or combine reliability with
Worry about funding for technology R&D?
Demand dollar savings vs. the current system?
Worry about the distribution system, which invades state PUC jurisdiction?
Enforce with penalties, or financial incentives?
Anticipate new technologies, such as distributed
generation and fuel cells, that might entirely transform the transmission grid?