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News Digest

Fortnightly Magazine - December 2000

to allow western energy suppliers to participate more fully in wholesale power markets in the state, and to allow it to lift interim bid caps imposed on suppliers in reserve markets. .

PJM Transmission Rights. The PJM Interconnection filed amendments to its Open Access Transmission Tariff to provide for a reallocation of fixed transmission rights (on the basis of load) among network transmission customers on an annual basis, to replace the prior procedure whereby network customers received a one-time allocation and could then retain FTRs in perpetuity, so long as they retained enough load. PJM's Energy Market Committee had recommended an annual reallocation because of "significant fluctuations in load" occurring among load-serving entities, due to retail choice in the PJM region. .

Revenue Assessments. The FERC announced a new method to assess annual charges against electric utilities to fund its activities, based only on the volume of electricity transmitted, rather than both transmission and volume of wholesales, as before. .

Mountain West Funding. The Nevada PUC denied a request by the Mountain West Independent System Administrator to set up a method for electric utilities to fund startup and operating costs and for the ISA through a surcharge on distribution rates, explaining that state law requires utilities to submit such a request. It also questioned whether state regulators should guarantee recovery of costs for transmission functions subject to federal jurisdiction. .

Power Plants

Interconnection Standards. Virginia Power filed amendments to its Open Access Transmission Tariff to include procedures for dealing with requests to interconnect new generating plants with the utility's transmission system, and to allow for recovery of costs from interconnection applicants in a manner that the FERC rejected in a similar case involving Carolina Power & Light Co.

Virginia Power's standards require the interconnection customer to pay the entire cost of any required evaluation study and facilities study, including costs related to a change in configuration or operation of adjacent transmission systems--a cost allowance that the FERC had rejected for CP&L.

Virginia Power argued that changes on adjacent systems (including interconnection queues) would affect power flows and congestion on its own system. It reasoned that the FERC had denied such costs in the prior case only because CP&L had failed to offer supporting evidence. .

Station Power Requirements. Citing doubts about whether the proposal was just and reasonable, the FERC accepted and suspended tariffs filed by the PJM ISO that would allow power producers the option of purchasing station power requirements (energy consumed on-site by generating plants) either at retail from utilities or at wholesale from the PJM Interchange Energy Market. .


Power Markets

California Price Caps. Though it declined to order retroactive refunds of excessive wholesale power costs, the FERC proposed a new "soft" price cap of $150 per megawatt-hour for the next two years in wholesale power markets operated by the California Independent System Operator and Power Exchange, whereby any suppliers bidding $150 per megawatt-hour or less may receive the market-clearing price, but those bidding more must take a price equal to their bids and file detailed information with