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Fortnightly Magazine - October 15 1998

approves "license-plate" pricing. That means that each customer taking network service pays a single rate based on the cost of transmission facilities in the service area in which the customer's loads are located. This compromise proved unavoidable, as other methods could have led to higher prices, discouraging ISO participation by public power agencies. (See, "Midwest ISO Wins Nod," this issue, p. 19.)

The FERC virtually conceded in its Midwest order that it was bowing to pressure from grid users who would otherwise balk at paying rational prices for transmission service. And some of those users operate outside its jurisdiction. Said the FERC: "[A] uniform composite rate might be appropriate if a regional transmission grid was first under construction, but we are not working on a clean slate."


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