RTO practice creates less risk and uncertainty over the nominal short-term wholesale price of power, but more risk and uncertainty over the long-term cost of transmission. That spells trouble for...
that since Nevada Power would give plant owners only a half-hour's notice ahead of scheduling deadlines on its purchasing decisions, the new plant owners would find it impossible to sell uncalled energy into day-ahead or hour-ahead markets for energy or ancillary services at the PX or the California ISO.
As the PX observed, "The shortest span of time between a CalPX auction and real time is four hours. ... Since the ISO accepts final hour-ahead bids ... no later than two hours before real time, the new owners ... could not even sell into the ISO grid through a bilateral transaction."
The Nevada PUC added that the plan would violate a March 10 order that gave first call on ancillary services to the planned Mountain West Independent System Administrator. The state attorney general objected that by reserving a call on ancillary services at a capped cost-based price, Nevada Power's plan would lessen interest of plant buyers and depress prices at the auction, hurting the state's electric ratepayers.
Florida Study. On April 13, the Committee on Regulated Industries of the Florida State Senate voted 7-0 to forward Senate Bill 2020 to the Senate's Committee on Governmental Oversight and Productivity.
Senate Bill 2020 would create the "Energy 2020 Study Commission," a 27-member committee to study industry activities around the country and assess Florida's electric needs over the next 20 years. See www.leg.state.fl.us/session/2000.
Interconnection Policy. On remand from a federal appeals court, the FERC approved revisions to the interconnection policy of Panhandle Eastern Pipe Line Co. It said it will now allow pipeline interconnections when five conditions are met:
- * parties seeking interconnection must bear cost of construction or build the facilities themselves;
- * interconnection must not adversely affect pipeline's operations;
- * interconnection and the resulting transportation must not diminish service to pipeline's existing customers;
- * interconnection must not cause pipeline to violate any environmental or safety regulation;
- * interconnection must not cause pipeline to violate its right-of-way agreements or contractual obligations.
Describing the situation as "getting worse and worse," the California PUC filed a complaint against El Paso Natural Gas Co., accusing the gas pipeline of anticompetitive conduct by awarding firm transportation capacity rights of approximately 1,200 million cubic feet of gas per day through a series of contracts to two marketing affiliates, El Paso Merchant Energy-Gas L.P. and El Paso Merchant Energy Co., which won out over some 24 other competing bids.
As the PUC charged, "Of course, El Paso Merchant could afford to pay above-market prices, because it was simply recirculating El Paso's shareholder money from one pocket to another." Supported by other electric and gas utilities, the PUC argues that El Paso will be able to monopolize gas capacity into California and "artificially drive up prices in California for both natural gas and electricity." The PUC acknowledged that the FERC recently upheld similar contracts granting large blocks of released pipeline capacity in the Southwest to Dynegy and Enron, but said of latest El Paso contracts, "this case cries out for a new FERC precedent."