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Frontlines

Fortnightly Magazine - November 15 1998

transmission can sometimes sell virtually for free in a condition of zero constraint under these newfangled ISO pricing schemes. Yet, at the gas conference, some of the pipeline reps in the audience asked why such mysterious auction mechanics should force them to take a lower price for their "bottleneck assets" than they might otherwise get through a straight-up bilateral deal.

It was not so long ago that the FERC floated but then abandoned a proposal (the CRT plan, or "Capacity Reservation Tariffs") to price electric transmission capacity on a commercial basis. Is the commission now using the gas pipeline industry as a "stalking horse" for electricity, to resurrect CRT, as economist Robert Blohm suggested to me a few days after the conference?

Comments are due January 22, 1999. You can expect to hear a lot more on this.

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