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News Digest

Fortnightly Magazine - August 2000

Arizona's Desert STAR ISO within three years. It noted that the June 6 Mountain West filing "makes no mention" of Desert STAR, and speculated on the reason:

"There is a reason for that silence. Sierra Pacific Co. has never been and Nevada Power Co. is no longer a participant in Desert STAR. Thus, the rationale for exerting a lighter touch in reviewing this application is misplaced."

The Arizona group called on the FERC to reject the June 6 filing as incomplete and order Mountain West to file a "complete" application responsive to the FERC's Jan. 27 order that gave conditional approval to a transfer of facilities to Mountain West.

"It is entirely possible that the Applicants, if they gain approval here of the lesser standard of conduct, will be back acknowledging that they wish to have the current construct continued and are not in a position to transition to an ISO or RTO," said the group.

"At the very least, the Commission should demand that Mountain West 'fess up up' as to what is going on and what the current basis is for representations that this is an organization with only a three-year life."

Merchant Transmission. The FERC agreed to waive notice requirements for the proposed 26-mile, 345-kilovolt merchant transmission line linking Connecticut with Long Island, so that project sponsor TransEnergy U.S. Ltd. could begin on July 3 to take "open season" bids for capacity. At the same time, FERC dismissed concerns noted by Dynegy (the FERC called them "non-substantive") that the bid evaluation criteria were too open-ended, since TransEnergie would enjoy leeway to consider "non-price" factors.

The FERC OK'd the project back on June 1, in what Commissioner William Massey termed an "evolutionary" order , and told TransEnergie to file details describing its open season for bids. But then Dynegy (though it "applauded" the proposal) questioned the bid evaluation criteria.

"TransEnergie goes on to state that bids will be evaluated based on the parties' negotiation of certain 'financial risk terms and conditions' [and] notes there will be 'other non-price considerations' ... [that might] reduce the project's risk and/or increase the project's value."

Dynegy added, "It is unclear whether the bid evaluation criteria ... would meet the FERC's standard for natural gas pipelines."

The FERC said it "agreed with Dynegy" that detail was lacking, but was satisfied that TransEnergie would disclose its evaluation process in the post-open-season report.

 

Environmental Disclosures. The Ohio PUC's newly approved retail electric service rules, modified on rehearing, drew criticism from two commissioners who objected to a requirement for power producers to disclose the fuel source for electric generation.

Commissioner Judith A. Jones voted against the rules, calling the requirement misleading and noting it went beyond a statutory requirement to compare air emissions to a regional average.

"It is nearly impossible," she said, "to provide accurate information because the generation mix changes over time and therefore the emissions data becomes outdated."

Noting that 90 percent of electric generation in the state comes from coal, she said that the rule "would do more harm than good to the