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Commentary - The RTO Drafts: Major Revisions Needed

Seven suggested plots, but no bestseller.
Fortnightly Magazine - January 15 2001

with regard to SPP itself, the proposed transmission tariff is very promising. The catch is that it would cover only 8 percent of that market.

In its proposal, Entergy has gone to great lengths to ensure that its new transco will retain the rights of an RTO, particularly in the area of rates, operational control, and transmission planning, but have none of the responsibilities.

For example, Entergy says its new transco and the proposed SPP RTO will have "full operational authority over their respective transmission facilities.'' But to have such authority, the transco must be an RTO, and Entergy admits that its planned transco does not, by itself, satisfy all of the required functions of an RTO.

Now there is a Catch-22 even Heller would be proud of.

Similarly, Entergy proposes that its transco will be able to provide for short-term reliability within its control area, including decisions on redispatch and power curtailments, with no oversight from the RTO. But FERC's Order 2000 states that RTOs have "exclusive authority for maintaining the short-term reliability of the grid that it operates.''

Either Entergy's transco is an RTO or it is not, but it cannot be both-unless of course Heller wants to revamp his original work.

3. GRIDSOUTH. The so-called GridSouth RTO conjures up visions of the monster in Mary Shelley's "Frankenstein." Like the misshapen creation of Victor Frankenstein, conceived in his own image, the GridSouth RTO is a cobbled-together entity that would incorporate all of the flaws of its creator. Worse, no one knows how it will behave once it is off the operating table and begins running the region's transmission grid.

However, there are plenty of clues in GridSouth's filing that its proposed RTO would be a monster bent on destroying the region's non-utility market participants. For example, GridSouth's utility backers plan to have their creation craft the rules for the region's new transmission market.

As a for-profit entity the transco would, therefore, have substantial incentive to tilt the rules in its favor.

Similarly, GridSouth's utility backers would select the board of directors who would be responsible for running this new creation, and the directors' compensation would be subject to utility approval.

These are hardly measures likely to guarantee the transco's independence-the bedrock on which FERC's RTO policy is built. The GridSouth proposal also is deficient in a number of other areas, including the key issues of transmission service comparability, future interconnection requests, and interregional cooperation.

As such, the commission should make sure this monster remains in the operating room.

4. GRIDFLORIDA. To the south lies the "Treasure Island" of Florida, whose three principal utilities have put forward a plan, GridFlorida, for a secluded, single-state RTO. There are some nuggets of gold buried in this proposal, but much like the GridSouth proposal, GridFlorida would be a for-profit transmission company. As such, it would be saddled with a host of now-familiar independence concerns.

EPSA supports the establishment of for-profit transcos, but those same entities cannot be responsible for designing the market.

Given the similarity of the GridSouth, GridFlorida, and even the Southern proposals,