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Fortnightly Magazine - November 15 2001

linked to energy production, such as flood control, agricultural irrigation, and fish preservation.

Enron's Steve Walton, formerly with hydro owner PacifiCorp, conceded that hydro systems operate differently, but said he had been "eating a lot of crow lately," and had come to accept LMP. He put his faith in the power producers:

"Let the generators decide where they want to build the plant-whether to build turbines in Southern California and take gas delivery on the new Sonoran pipeline, or build in Nevada and Arizona instead and use a new transmission line to move the power to California. And availability of pollution rights will play a role in this."

SO THE RTO MIGHT MORPH INTO A SOVIET-STYLE CENTRAL PLANNER. Some want eminent domain rights for new transmission lines, but that could make things worse-and steal turf from state regulators.

"You cannot combine a merchant transmission solution with eminent domain rights," said Vermont regulator Michael Dworkin.

"State eminent domain laws require proof that the project at hand is the most efficient alternative. That ... will automatically involve a governmental decision on efficiency and planning.

"I, as a state regulator, will be forced to choose between a pipeline and transmission ... I will want some help from the RTO ... but an RTO pre-approval process will act like a prudence review and then will be binding on the state PUC."

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