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News Analysis

IPPs and other stakeholders long have called for standards, but this time, the FERC just might oblige.
Fortnightly Magazine - October 1 2001

about misunderstanding on the other side? Says the diplomatic Lange, "I think the transmission people-and I try to dissuade our people from looking at it this way-think the generators just want everything. They want all the costs, they want everything. And I don't think that's true. I think generators that I've been associated with are more than willing to spend whatever money is necessary to get themselves hooked up that's reasonable and fair for them to pay."

Perhaps Lange's having been on both sides of the fence has given him more of a peace-maker perspective. "There really is just a lot of bitterness in both camps. I think it would really help if there was more working together and everybody understood where the other person was coming from," he says.

FERC Action Coming Soon?

Power producers like Dynegy no doubt would like to see FERC step in and deal with the issue comprehensively as opposed to piecemeal. That hasn't happened yet, of course, but there are indications that the FERC might be ready to tackle the issue. In a June 15 concurring opinion in the Dearborn Industrial-Detroit Edison case, Chairman Pat Wood called for the standardization of interconnection terms and conditions, including charges, reliability protocols, reactive power issues, voltage levels, and metering requirements, on either a national or regional basis.

"It is inconceivable that generators and transmission service providers would have to expend resources litigating these issues before the FERC ... ," he said. Wood's concurring opinion generally kept with his recognized philosophy of encouraging plant development.

"The practice of requiring new generators to bear a portion of transmission system interconnection costs results in unequal treatment of new generation compared to pre-existing utility owned generation, whose transmission costs are generally rolled into overall transmission rates," he said. "We will never have a truly level generation playing field if new facilities must recover transmission costs in their rates that existing facilities do not bear."

Wood also stated a preference for the Texas PUC's single "postage stamp" transmission rate assessed on load to recover the costs of transmission service providers, "so the costs of all transmission are borne equally by all customers in ERCOT."

Of course, as Hayden says, nobody is holding their breath for FERC action since the commission has so much on its plate these days. But organizations like EPSA remain hopeful, especially now that a new commission is in place. "We're hoping that in the near future there will be a [notice of proposed rulemaking]," says Mark Stultz, vice president, public affairs and marketing at EPSA.

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