Commission Watch

Deck: 
FERC faces a growing chorus of rebellion on earnings incentives.
Fortnightly Magazine - April 15 2003
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FERC faces a growing chorus of rebellion on earnings incentives.

"If I may say, today, we the states are the chosen ones." That was Virginia utility commissioner Hullihen ("Hulli") W. Moore, speaking on the phone in January with Federal Energy Regulatory Commission (FERC) Chairman Pat Wood and other federal and state regulators, trying to untangle the business of transmission reform.

Moore's comment proved prophetic. Within two months, the state public utility commissions (PUCs) representing Pennsylvania, Michigan, and Ohio took the extraordinary step of asking FERC to overrule any state that would block FERC's plan, in a motion filed in March.

The problem was none other than Hulli Moore's Virginia. In February, the Virginia General Assembly had enacted House Bill 2453, a law prohibiting any Virginia utility from transferring ownership of its transmission system, and the state's governor had shown no inclination to cast a veto. American Electric Power, with a subsidiary operating in Virginia, had cited the new law as reason to go slow on joining PJM-or any regional transmission organization (RTO), as it had promised as a condition of its merger with Central & South West.

The three PUCs were aghast. They saw Virginia as hijacking FERC's agenda:

"Since AEP indicates that it cannot operate its Virginia-based transmission facilities separately from the rest of the system, Virginia and the Virginia Commission are exercising de facto jurisdiction over a wholesale electric market region which extends over the SPP [Southwest Power Pool], MISO [Midwest ISO], and PJM [Pennsylvania-New Jersey-Maryland Interconnection] regions covering 27 states and the District of Columbia." .

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