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Electric Reliability Sanctions or Commerce?

Fortnightly Magazine - May 1 1998

and the industrial coalition).

The comments from TAPS set the stage for the case: "[It] raises a fundamental issue; the extent to which the NERC¼ policies, practices and requirements that are implemented by jurisdictional utilities must be filed with the FERC [for] review under the Federal Power Act."

However, the comments from Electric Clearinghouse Inc., proved the most revealing, giving the best explanation of what irked the power marketers: "[I]t leads one to ask whether the problem that led¼ to tagging¼ is truly a physical, reliability problem, instead of¼ an accounting problem."

Clearinghouse explained how line relief rules can prejudice power marketers: "If a [marketer] wheels across three utility systems under firm point-to-point transmission service, and then makes an economy sale to a fourth utility as a non-designated network resource, the entire transaction is deemed non-firm. And, to the extent [it] is deemed to have a mere 5 percent impact on a parallel path, such transaction may be curtailed."

CAPT provided other examples: "[In] August 1997, a transmission customer selling power to Central and Southwest lost a 50-megawatt supply from Union Electric¼ due to line loading relief in the Southwest Power Pool¼ CSW cut the schedule [because] it had not been tagged¼ The transmission customer called CSW's scheduling desk and explained it had faxed the tag¼ CSW replied: 'No tag, no flow, end of discussion.'"

On the other side, NERC said it was looking at the problem (em that a task force had recommended several changes to tagging requirements, including making it optional whether to identify ramp rates or generation source and ultimate load. It said it would send the completed tag only to sending and receiving control areas and transmission providers (em not to all purchasing and selling entities up and down the transaction, as before.

The Edison Electric Institute supported NERC's argument, claiming the CAPT filing was "misleading, premature and unripe." Said EEI: "CAPT paints a bleak picture of what is actually a very rich and changing landscape. As the Commission is fully aware, NERC is sending notices of meetings [and document drafts] through the mails, FAX and the Internet."

Others noted that the FERC lacked jurisdiction to dictate to NERC.

To solicit ideas on how to deal with the problem, the FERC asked the electric industry for comments, but the effort backfired. The FERC had preferred to sit back and wait for individual complaints to filter in, but many in the industry told the Commission that what they really wanted was a brand-new rulemaking. (See "Reliability: FERC's New Gig?" Public Utilities Fortnightly, April 1, 1998, p. 18.)

Sure enough, that wish came closer to fruition with the petition filed March 25. There, the power marketers urged the FERC to move toward a market solution to reliability, away from the old method of threats of curtailment for violation of reliability rules. To support that idea, it described how curtailment fails to achieve economic efficiency in managing transmission line congestion: "We are informed by the MAPP operator that the average efficiency of this form of managing line loading through curtailing transactions