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A Hope, A Wing, and A Prayer

On the virtues and vices of ICAP, ACAP, FTRs, hubs, flowgates, DAMs, and gaming.
Fortnightly Magazine - April 15 2002

Feb. 5, in a three-way conversation between Schnitzer, FERC staffer Kevin Kelly, and merchant transmission booster Ray Coxe, senior vice president for transmission marketing at Trans-Energie, U.S. Ltd.

Kelley, representing yesterday's paradigm, opened the conversation as he asked how his agency could possibly figure out how to allocate FTRs to ratepayers who benefit from new transmission construction.

Kelley: "We're building additional transmission here [that] relieves congestion on a system 500 miles away, because there were loop flows. ...

"I can easily see that there could be many debates over who are the beneficiaries, how they're allocated ... that could make it difficult to simply say, well, we'll allocate FTRs."

Schnitzer: "It's a good question, Kevin [but] we're obviously thinking about this a little bit differently.

"The processes that I'm talking about ... expansion-oriented, are inherently risk projects. They compete with generation. That's what they are. "

Coxe: What I don't want as the developer of a lot of merchant transmission projects is to discover an RTO that is now on a mission to build projects that effectively compete with mine. ...

I might suggest of the two systems ... that one system does build smarter transmission, and that's the system where people are betting their own money.

I think while maybe nobody in this room has met a stranded transmission line, they're out there, and they'll exist in the future."

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