Some will stray from ethical behavior. But markets must be regulated to maintain confidence.
'RTO Week' finds FERC still unsure about electric transmission.
If you think the feds have this transmission thing figured out, think again. Listen to Commissioner Bill Massey, as he groped for ideas during "RTO Week," the five-day workshop conducted last month by the Federal Energy Regulatory Commission (FERC) to formulate policy for its latest scheme, the "regional transmission organization."
"Are we so underbuilt in transmission," he asked, "that we don't just need a process, but a specific process that guarantees expansion?" J
unior commissioner Nora Mead Brownell could add little else than to suggest more hearings: "Maybe what we need is another working group with state regulators, traders, and consultants to tell us what information we need."
And then there was Commissioner Linda Breathitt, bless her soul, who confessed that, "Up until this week, I had never heard of 'flowgates.'"
Yet Breathitt did contribute one of the more cogent observations of the week:
"FERC has no experience in setting up a process for evaluating transmission projects and putting them in place," said Breathitt, "as [we] have in the area of gas pipelines. So FERC has trouble envisioning how the process should look at an RTO."
The real star of the week was José Delgado, the Cuban dynamo. He was the only one at RTO Week with a clear idea of his purpose on Earth-which is to build more transmission lines.
(My apologies here to attorney Sue Kelly. She brought the house down with her 'show tunes' theory of regulation-how she learned from that it's better to be a bee, like Enron, than a flower, like a rural co-op or other small utility-but , was that really necessary?)
Delgado, known by some as "Mr. Transmission," worked formerly with Wisconsin Electric Power, where he helped develop the Midwest Independent System Operator. Today he serves as CEO of American Transmission Co., a for-profit, transmission-only monopoly that operates primarily in Wisconsin. And he is tanned, rested, and ready.
"We have no native load. Everyone is a customer."
Delgado, you see, has no choice. Transmission is all he's got: "We have only two flavors of service, network and point-to-point."
Of course, Delgado does face some self-imposed limits. He insists his credibility is on the line with every project, so he'll choose which ones to forward to the RTO planning committee, if it comes to that.
"Please don't think that all I'm doing is putting sticks in the mud and stringing a wire between them," he pleaded. "If I get a request by some one to build a line to move 1000 megawatts from Vermont to Wisconsin, the first thing I check is the sanity of that person."
Yet Delgado appears dead-set on his mission.
"You have a system that is naturally biased against building new transmission," he explained. "Transmission comes in big lumps and takes a long time to build. So yes, we are going to be building too much, probably. But if the load is there we better have the transmission lines ready, or there will be hell to pay and