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News Digest

Fortnightly Magazine - February 1 1999

the utility should utilize an existing "experimental bypass rule" to retain industrial customers rather than impose price cap regulation. Docket No. 97-00982, Oct. 7, 1998 (Tenn.R.A.).

Transmission and ISOs

TLR Protocols. The FERC on Dec. 16 ruled that utilities using the North American Reliability Council's proposed transmission relief procedures for relieving constraints on transmission loading systems caused by parallel loop flows, must amend their pro forma open access tariffs to include those procedures. The ruling came after NERC's request for FERC to address the relationship of the proposed procedures with Order 888's pro forma open access tariff. Docket Nos. EL98-52-000, ER98-3709-000, Dec. 16, 1998, 85 FERC ¶61,353.

NEPOOL Restructuring. The FERC on Dec.16 approved market-based rates and market rules proposed by the New England Power Pool, thereby adding a bid-based spot market to other restructuring components approved earlier, including a transmission tariff and requirements for the independent system operator.

Measures were implemented to allow the ISO to monitor the possible exercise of market power. And while FERC noted that Northeast Utilities exceeded the 20 percent threshold in certain markets for possible exercise of market power, it found that proposed mitigation measures were sufficient to preclude that possibility. Docket Nos. OA97-237-000 et al., Dec. 17, 1998, 85 FERC ¶61,379.

PJM Locational Pricing. Old Dominion Electric Cooperative has petitioned the FERC to investigate the use of locational marginal pricing by the Pennsylvania-New Jersey-Maryland power pool, arguing in effect that it rewards native load served by utilities with their own generating resources, and penalizes smaller utilities with native load dependent upon purchased power. It charged that locational pricing had hiked average hourly energy prices by 24 percent since April 1, and caused energy prices to spike to nearly $1,000 per megawatt-hour several times during summer 1998.

The co-op claimed that once a large utility has met its load requirements, it may sell its power outside the PJM pool. Those exports can then be brought back in - at market prices - to supply other members of the pool. Old Dominion argued that pool generation was sold to non-native load customers and then after the bidding process increased rates, was bought back and sold to pool members at "exorbitant prices." Docket No. EL 99-9-000, filed Nov. 4, 1998 (F.E.R.C.).

PJM Capacity Market. The Pennsylvania PUC settled a dispute with PECO Energy Co. concerning the establishment of a capacity market in the PJM Interconnnection. Previously, the PUC had directed PJM capacity holders to release or offer installed capacity at $19.72 per kilowatt-year.

Under the newly approved agreement, PECO will offer capacity credits to competitive generation providers who serve residential users within its service territory at $19.72 per kilowatt-year prior to June 1, 1999 and at $22.412 from June 1, 1999 through the end of the year. Docket No. R-00973953, Oct. 30, 1998 (Pa.P.U.C.).

Generating Plants

Seabrook License. The Nuclear Regulatory Commission has terminated proceedings involving a proposed license amendment for the Seabrook nuclear power plant that had raised a question of first impression.

North Atlantic Energy Services Corp. had asked to revise the license to allow plant