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News Digest

Fortnightly Magazine - November 1 2000

of fixing itself.

"We have a board that's mired in self-interest and ideological rigidity that insists that it has to do something different from what the professor from Harvard tells them, even if his market structure works and theirs doesn't.

"You are not going to get any fundamental change in the congestion management reform proposal. We've already had the initial votes at the ISO. And it's clear that the majority there favors maintaining the course of cosmetic changes."

According to UCAN executive director Michael Shames, the FERC faces a moment of crisis.

"I suggest to you, bluntly, that you are on trial [and] in addition ... you need to get new counsel. Because I think frankly your agency is in trouble of losing this case." .

New York Price Spikes. In a one-page letter mailed Sept. 5, FERC chairman James Hoecker told New York City Public Advocate Mark Green that the FERC would not open a separate investigation of electric price spikes in the downstate area. "I, like you, am concerned," wrote Hoecker. But the chairman cited FERC orders allowing the New York ISO to set caps and restrictions on bidding in various energy markets, and reasoned that no separate study was needed.


Electric Reliability

MAAC Region. The Mid-Atlantic Area Council, the regional reliability council that covers essentially the same region as the PJM Independent System Operator, has OK'd and filed a new governance agreement, reportedly approved by 95 percent of MAAC members, and creating among other things a new energy market committee to examine the interplay of electric reliability and commercial power markets.

MAAC noted that its old governance agreement was behind the times, as it had allowed only 13 full voting members out of a total member role that had swelled to 180, with the addition of many private power producers and marketers. Under the new governance, MAAC will employ an 11-member administrative board and will contract with PJM for administrative support. .

Resource Planning. The Iowa board, citing a need to take a "proactive role" in improving the state's energy outlook over the next decade, said it would expand its investigation into transmission and distribution reliability to include generation resource planning. The board noted that the "Mid-Continent Area Power Pool 2000 Load and Capability Report" projects that MidAmerican Energy Co.'s capacity reserve margin will be 16.5 percent—only 1.5 percent above MAPP's 15 percent reserve requirement—and that reserve margins are projected to fall below 15 percent by summer 2003. The state's three investor-owned utilities—IES Utilities Inc., Interstate Power Co., and MidAmerican—are to file on or before March 1, 2001 information for 2001 through 2010 on resource planning, reserve capacity projections, and "weather assumptions" used in forecasting load. .


Power Plants

Nuclear Shutdown Costs. The FERC affirmed that on the shutdown of the Connecticut Yankee nuclear plant, the plant owners could recover costs relating to amortization of investment and other matters separate from the decommissioning itself. .

Divested Plants. The FERC agreed to hear a complaint filed on June 30 by Allegheny Electric Co-op, accusing Pennsylvania Electric (Pennelec) of