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News Digest

Fortnightly Magazine - July 15 1998

calling for elections of PSC commissioners would be placed on the ballot for voter approval;

• Workforce Transition and System Reliability (A.8578) -- Standards would be set for worker training and for job transition and retention for any utilities undergoing certain types of restructuring;

• Energy 2000 (A.7941-C) -- To restructure the Power Authority of the State of New York and operate a fund to support energy efficiency and other projects; and

• Nuclear Restrictions (A.10214) -- To forbid PASNY from acquiring nuclear power facilities or related debt.


ELECTRIC TRANSMISSION PRICING. In a novel case, the FERC has allowed Commonwealth Edison Co. to implement an experimental, one-year tariff for nonfirm electric transmission service that will feature redispatch service to alleviate curtailments or interruptions -- both for nonfirm point-to-point service and for network customers using non-designated resources.

When ComEd uses its own resources to offer redispatch, it will price the service at the higher of (a) its embedded-cost transmission rate, or (b) its estimated incremental energy cost (opportunity cost), as represented by a 10-percent adder capped at 10 mills per kilowatt-hour. Thus, the case marks the first time the FERC has approved opportunity-cost transmission pricing based on estimated costs, rather than on an actual cost true-up. When redispatching neighboring systems, ComEd would receive payments for transmission only and would pass on to third parties the additional costs for generation incurred in making such arrangements.

As the FERC explained, its pro forma open-access transmission tariff, defined in Order 888, does not obligate any transmission provider to offer redispatch service or opportunity-cost pricing. Nevertheless, the commission had indicated that it would encourage pricing flexibility. It said it approved the ComEd tariff on an experimental basis because it would offer price certainty to transmission customers. Also, after-the-fact reporting of actual redispatch costs will help the commission to determine how well prices track actual costs. Docket No. ER98-2279-000, 83 FERC ¶61,145, May 13, 1998.

ELECTRONIC FILINGS. The FERC has issued a notice of proposed rulemaking asking for comments on how it should create a more efficient electronic information system to process and distribute the hundreds of filings it presently receives on a daily basis. The Commission believes that a "paperless" environment could save money. After it reviews comments, FERC will schedule a technical conference and establish working groups to study its goal of a paper-free regime. Docket No. PL98-1-000, May 13, 1998 (F.E.R.C.), 63 Fed.Reg. 27529 (May 19,1998).

QF STANDARDS. The FERC has clarified that when a qualifying cogeneration facility fails to meet the Commission's technical operating standards for certain periods, prompting a utility to suspend its power purchases from the QF facility during the period of temporary noncompliance, any contract refunds between the QF owner and the utility should be based on the utility's alternative hourly economy energy costs. Thus, for any hour in which the QF was available but not dispatched, the utility must compensate the QF owner for value provided, if the cost of the QF energy would have cheaper than alternative economy energy. The QF would repay the utility if economy energy was cheaper.