Regulators are starting to show signs of strain over the restructuring debate.
Up to now, many in the industry thought everybody but the regulators had tired of the constant back-and-forth over regional market issues such as standard market design. This is not to say that state regulators have been able to find any common resolution. In fact, in our annual Regulators Forum on page 22, PUC chiefs from five states continue to disagree on what role the federal government should have. In fact, one state commissioner, testifying before the Federal Energy Regulatory Commission (FERC) in late September on PJM and Midwest ISO issues, worried that the industry infighting might never end.
Alan Schriber, chairman of the Public Utilities Commission of Ohio, said: "The overwhelming message that comes through in this proceeding is that this stuff can go on and on, a classic clash between public policy and private interests … a clash within each one of those categories. There are public policy-makers that are clashing over what needs to be done as well, as we have heard, with the private interests. As an economist, I think this way, that everybody... pursues what's in their best interests.
"The many companies that are here are all represented by very honorable and intelligent people, as we all know. They are all there to maximize shareholder value … maximize profits … and, in many cases, to maximize … their own visibility. I can say the exact same thing for those who represent the private interests, which are primarily the states. If in fact, private interests do not agree with one another, I think the optimum strategy on their part in pursuing their interests would be to drag this out as long as they possibly can. In the public realm we have states, many of [which] wrap themselves in the whole shroud of pre-emption. No one likes to be pre-empted. The feds are not going to pre-empt us, as is often said."
When speaking to the Fortnightly on this issue, Schriber said he was open to respecting regional differences when it comes to market development. But in his FERC testimony, he was a bit annoyed at the other PUCs in his region dragging their feet on allowing AEP participation in PJM.
"The states of Virginia and Kentucky, two states that have basically walled themselves from the rest of the region, I think in the short run may be making sense. I think in the long run they are absolutely going to shoot themselves in the foot if they continue along this policy. In the long run it is going to be very, very bad for those states [that] fail to move along with the rest of the region," he said.
Schriber noted that his staff has been coming to RTO-related meetings. Certainly, one may be forgiven for wondering whether the infighting will outlive us all.