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Transmission on Trial?

Not hardly. The Court will review open access, but the ratepayer is the real defendant.

Fortnightly Magazine - March 15 2001

line between local distribution and long-distance transmission—a line that vanished long ago. The federal appeals court said as much last year when it upheld most of FERC Order 888:

"[W]hile the electricity world once neatly divided into spheres of retail versus wholesale ... and local distribution versus transmission ... such is no longer the case." Words like these are mother's milk to the Supreme Court. No Justice can resist the urge to look the law straight in the eye and declare it ambiguous, irrelevant or unconstitutional. That's the court's highest calling. It's the balance of powers between Washington and the states that makes this case important. In Order 888, the FERC deferred to state authority over the "retail" portion (whatever that is) of electric transmission used by utilities when they sell traditional, integrated electric service to captive ratepayers (the so-called "native load" customers). But the FERC seized jurisdiction over retail transmission when it is unbundled from distribution under programs that introduce retail choice. This power grab irked the state PUCs no end. Former Ohio regulator Craig Glazer captured that view in our pages a few years back. He predicted that FERC's rule would mire the feds in claims about stray voltage interfering with milk production on dairy farms:

"The FERC has not explained why unbundling changes the nature and exercise of its jurisdiction. ... Do I now send the citizens groups and irate farmers with cows in tow down to North Capitol Street because only the FERC has jurisdiction over transmission?" (".)

And so in the case of , the supreme court will hear an appeal by regulators from the Empire State, plus the PUCs of Florida, Idaho, New Jersey, North Carolina, Virginia, Washington, Vermont, and Wyoming, on whether the FERC jurisdiction over retail transmission violates the Federal Power Act. The nine PUCs say the FERC's move violates FPA section 201(a), which concedes federal regulation over interstate transmission and interstate wholesale transactions. But in the last clause of that section, Congress muzzled the feds by limiting such authority "only to those matters which are not subject to regulation by the states."

The irony, of course, is that the state PUCs never exercised their jurisdiction over retail transmission. Try to remember a traditional utility rate case in which the state PUC reviewed the prudence of transmission investment. You can't, because no such case exists over the past 20 years-not to my knowledge, anyway. But, with their influence waning, the PUCs are suddenly filled with desire to recapture the power they never used.

IF THAT WAS ALL THERE WAS, THIS APPEAL WOULDN'T MATTER MUCH. BUT THERE'S MORE. In a second companion case, the High Court also agreed to review appeals by Enron Power Marketing Inc., aimed at overturning the preference for bundled native load.

In particular, Enron has asked the Supreme Court to explain why the FERC has not required electric utilities to put point-to-point service on an equal footing with network transmission service dedicated to captive native-load ratepayers taking bundled retail sales service. Enron (and many others) believe the FERC has coddled native