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News Digest

Fortnightly Magazine - April 1 2000

would oversee the ITC.

The ITC would plan and carry out its own transmission additions and upgrades, and file its own rate structures for transmission, congestion management, and ancillary services, with its own scheme of performance-based incentives - factors that have led some to question whether the ITC might overshadow the Midwest ISO.

The FERC acknowledged that ComEd's binary RTO proposal was not yet fully formed, but deflected objections by intervenors who complained that the ITC had not committed to a single system rate, as had the Midwest ISO, but would reduce MISO's regional value by retaining separate tariff filing authority. The FERC preferred to praise the ITC's flexibility and noted that its proposed congestion management system included "many appropriate elements," while the MISO had not yet developed its own market-based system for congestion pricing. .

Line Construction. On Feb. 29 the New York PSC announced that it had authorized the Long Island Power Authority to construct a 22.5-mile underground electric transmission line, set to begin operations at 69 kilovolts, but capable of expanding to 138 kV. .

Public Power

Co-op Support Structure. California's electric industry has formed a new rural electric cooperative, known as Golden State Power, to serve as a statewide support organization for utility cooperatives. The new co-op also will collaborate in California with Anza Electric Co-op and Plumas-Sierra Rural Electric Co-op, and with two newly formed energy buyer cooperatives, the California Electric Users Co-op and the California Oil Producers Energy Co-op.

Studies & Reports

Ancillary Service Pricing. The Oak Ridge National Laboratory has published a study by Brendan Kirby and Eric Hirst providing a more detailed look at some of the ideas regarding pricing of ancillary services that the authors explored earlier in these pages in their article, "Ancillary Services: A Call for Fair Prices," published Jan. 1 in , p. 32.

In their Oak Ridge study (ORNL/CON-474), "Customer-Specific Metrics for the Regulation and Load-Following Ancillary Services," Kirby and Hirst offer a "vector-allocation method" for calculating correlations between loads and requirements for ancillary services. For more detail, see www.EHirst.com.

Retail Competition. A study released by the National Energy Marketers Association claims that regulators impede energy competition by setting rules that assign default customers (those choosing not to choose) to incumbent utilities.

"A presumption that customers want the utilities to supply competitive services does not exist in the telecom industry and should not exist in the new energy industry either," said NEMA president Craig Goodman.

In its study, "National Guidelines for Designing and Pricing Default Energy and Related Services," the NEMA suggests that the markets are developing quickly where default pricing reflects the true costs of providing retail services, as opposed to where those costs are hidden in distribution rates. It cites Massachusetts and California, where default prices at the start of competition were set at or below the wholesale cost of power (with some generation service costs buried in the distribution rate), spawning few active competitive suppliers and prompting very few consumers (about 1 percent) to choose a competitive supplier.

In Pennsylvania, however, where NEMA contends that