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News Digest

Mergers & Acquisitions
Fortnightly Magazine - May 15 2000

(3) separation of generation from transmission and distribution, (4) consumer protection, and (5) distributed generation and interconnection standards. It plans to issue proposed rules by August.

Electronic Data . Initial comments are due May 19 at the Arkansas PSC on a proceeding to set rules governing the electronic exchange of data. A public hearing is set for June 27, with a final ruling due on or before Aug. 14.

Alabama Restructuring. In April the Alabama PSC was set to open the first round of public hearings on electric utility restructuring.


Transmission & ISOs

California ISO Tariffs. On April 10 the California Independent System Operator filed its 660-page answering brief in the ISO's massive tariff case at the FERC, addressing scores of the hundreds of so-called "unresolved issues" that have been left pending since the ISO submitted a proposed clarification amendment to its tariff in July 1998.

The brief deals with at least 15 separate categories of issues, and each category in turn can contain a dozen or more discrete issues: (1) ancillary services, (2) voltage support, (3) ISO dispatch authority, (4) the inter-zonal congestion management regime, (5) recognition of pre-existing contract rights for transmission services, (6) market monitoring, (7) metering, (8) metered subsystems, (9) outages, (10) portfolio bidding, (11) the ISO's relationship with the Power Exchange, (12) scheduling coordinators, (13) settlements, (14) transmission pricing and losses, and (15) the ISO's transmission control agreement.

Issue No. 298, regarding congestion management, is typical: "Is the 3000-bus model adopted by the ISO for prices and decisions on inter-zonal access anticompetitive, unjust or unreasonable, or should the ISO adopt a simplified commercial 15-bus model, which treats all resources within a zone identically on a zonal basis?"

And the question of pre-existing contract rights was made more complicated on March 24, when the Western Power Trading Forum filed a complaint against the ISO , charging that the ISO's grid management charge is excessive and anticompetitive, due in part, says WPTF, "to the subsidy that the ISO affords holders of existing contracts."

But the ISO downplays the complexity, saying that "The actual number of issues truly in dispute in this proceeding is smaller [than 100] because in some instances the issues have been resolved."

NY ISO Prices. Just three days after Niagara Mohawk filed a complaint alleging collusive conduct in New York's market for generation reserves, the New York Independent System Operator asked the FERC for authority to suspend market-based bids for 10-minute nonsynchronized reserves (NSRs), citing its own evidence of market distortions.

The ISO request notes that market shares for NSR capacity in New York are highly concentrated and suggests that beginning Jan. 29, producers withheld NSR capacity from markets, driving NSR prices above prices for spinning reserves, which should not ordinarily occur, since spinning reserve denotes a higher quality of resource. FERC Docket ER00-1969-000, March 27, 2000.

MAPP + MAIN. Representatives at MAPP (Mid-Continent Area Power Pool) and MAIN (Mid- America Interconnected Network) signed a memorandum of understanding to merge the reliability functions of the two organizations - just a month after MAPP's corporate contractor