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News Analysis

Fortnightly Magazine - April 1 1998

very close to the control board or you lose your expertise very quickly."

In fact, a crucial point leading some to favor a new FERC NOPR with an open process comes from the notion that with broad industry participation by industry stakeholders, the FERC could satisfy itself with an appellate-style review of due process concerns. It would ask simply if all stakeholders were allowed and welcome to participate. Was the process fair? The commission would avoid engaging in de novo review (em any substantive look at the rules themselves.

Thus, with the assurance that the stakeholder process itself largely would be conclusive, and without second-guessing from the commission, many industry players with limited staff resources felt they would have reason and inclination to participate fully.

"APPA would find a way to devote more resources at the industry level if we knew that the FERC was going to give deference to the stakeholder process," volunteered Kurt Conger, director of policy analysis for the American Public Power Association.

"We don't have enough resources to participate in all the NERC task forces," added Sue Kelly, "knowing that the FERC is going to enforce de novo review anyway. That's the worst of both rules."

On the other hand, however, no party objects more strenuously to a reliability NOPR at FERC than does NERC itself, which has invested much effort in reforming itself from within. In its formal written comments, NERC cited recent internal reforms: (1) mandatory compliance with standards imposed by regional reliability councils; (2) election and seating of two customer representatives on NERC's Operating Committee in November (the Engineering Committee was to follow suit soon); (3) appointment of a panel of outside experts; (4) formation of Compliance Subcommittees within the Operating and Engineering Committees; and (5) newly coordinated programs to set standards for training and qualification of system operators.

NERC also cited "a growing awareness" among its members that some form of federal legislation would be required to ensure compliance with reliability standards. One model would call for a self-regulating organization, set up in a manner similar to the National Association of Securities Dealers. Known either as the SRRO (Self-Regulating Reliability Organization), or NAERO ("North American Electric Reliability Organization"), this new organization would operate under the unambiguous (if light-handed) supervision of the FERC.

Speaking at the public conference, NERC President Michehl Gent said, "I'm very much opposed to a new rulemaking. At NERC we've spent a lot of money to restructure and move forward. If you [the FERC] initiate a new rulemaking then our process grinds to a halt. You become the center of attention."

Bruce W. Radford is editor of the Fortnightly

Regional Matters: A Role for States?

THE New York Public Service Commission advises that states are often in the best position to examine and determine need for local reliability measures. For example¼

TRANSFORMERS. On the West Coast, transmission-level transformer outages are rarely considered a major concern, as most high-voltage transformers [include] three single-phase transformers, with a spare on site. In contrast, the East Coast has the lower-cost three-phase transformers without an on-site