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News Analysis

Fortnightly Magazine - April 1 1998

rules proposed by the regional reliability councils violate the pro forma tariffs."

In its notice of the conference, the FERC had asked the electric industry to consider three procedural options to incorporate reliability rules into transmission tariffs. (See sidebar, "Updating Transmission Tariffs.") Those three options revealed concern at the FERC over its limited resources and an apparent preference to play the role of after-the-fact adjudicator rather than policymaker.

One process, piecemeal tariff amendments by electric utilities, saw little support from industry. Electric Clearinghouse Inc. terms that option the "one-by-one and everyone" procedure, and found it "administratively burdensome." Steven J. Kean, senior vice president of Enron Corp., added: "Order 888 created a company-by-company tariff approach. ISOs create a region-by-region approach. But most of our deals cross more than one system."

Kean cautioned against taking the easy way out: relying primarily on rules already followed by NERC or regional reliability councils. His comment typified many of the concerns of industrial customers, the Electric Consumers Resource Council (ELCON) and some power marketers.

"We acknowledge that NERC is reaching out," said Kean, "But we're still a year away from balanced membership. And we're two years away from a balanced governance structure."

Others noted that NERC rules for Security Coordinators (22 nationwide) contained no provision guaranteeing nondiscriminatory treatment in curtailment, scheduling or dispatch (em contrary to FERC's operating principles for ISOs. Thus, in areas without ISOs, a rubber stamp of existing reliability rules, even with a complaint procedure, will leave transmission-dependent suppliers unprotected.

Kevin A. Kelly, from the commission's office of electric power regulation, highlighted the FERC's apparent preference for a procedure built on case-by-case complaints. He emphasized that the FERC might fail to uncover discrimination if it should attempt to review reliability rules proposed on a generic basis by NERC, or through a broad stakeholder process:

"I've read the NERC rules sparingly. They read like motherhood and apple pie. You may read the NERC rule or the reliability council rule and may find nothing wrong. The problem, however, may arise when an individual operator interprets the rule. So, if we go through a process to review rules we may end up finding nothing.

"Or, we may end up only serving as a forum to rewrite the NERC rules to make them clearer. Why not wait for NERC to make the rules clearer?"

Kelly's concerns seemed to draw support from José Delgado, assistant vice president at Wisconsin Electric Power Co., chairman and president of the MAIN regional reliability council (MidAmerica Interconnected Network) and a member of the Department of Energy

Task Force on Electric Reliability.

"As an operator," noted Delgado, "I am indifferent to the sequence of curtailment, as long as I can complete all the curtailments in the required time. But, as a user, I am not indifferent to sequence. The problem lies with the application of the rules."

FERC Chairman Hoecker appeared to favor process number one: The commission would not approve reliability rules directly, but would encourage aggrieved parties to file complaints under Federal Power Act section 206, where the FERC would redress discrimination.