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The Regulators Forum - States to Feds: Don't tread on Me

How far do states rights go in transmission planning?
Fortnightly Magazine - November 15 2003

and it appears that this position has spared our state from the fates that have slapped several of our regional neighbors. Our state's approach also seems to be bolstered by the about-face taken by many states that once supported retail competition.

The bottom line is that a major shift in our state regarding retail competition is unlikely in the near term.

F: What is next for regional transmission entities in Idaho?

PK: It could be argued that from the beginning the RTO West process was slowly sputtering forward; however, what seems evident is that shortly after FERC announced its intention to release a standard market design proposal, the RTO West process stalled. This situation left the filing utilities pondering their next steps.

Substantial work had been accomplished, and walking away from the process was not an option. So at the request of state commission staff members, the RTO West filing utilities recently reconvened the Regional Representatives Group (RRG) process to consider what solution works best for the transmission system in the Pacific Northwest. (The RRG consists of interested stakeholders, including state commission representatives and consumer counsel staff members, affected by the operation of the transmission grid in the region.) Although FERC has issued rulings on some aspects of RTO West's filings, some issues remain unresolved, and some need more work. However, the RRG did not start its recent efforts from scratch, but rather, built on the work accomplished previously by numerous RTO West working groups.

The RRG revitalization has led to the development of three options currently being considered and discussed to determine their commonalities and compatibilities. Each option group has developed an approach to the following problems and opportunities presented by the regional grid: planning and expansion, use of the long-term access, control area functions, cost recovery, and market power. The option groups are also looking at implementation and at costs and benefits. The RRG is the existing system, providing a forum for and creating the possibility for the convergence of these approaches.

State staff members have recommended that, whatever solution is derived from the RRG process, the RTO West filing utilities file a plan of action with the states first before returning to FERC. This goes hand-in-hand with the notion of the Pacific Northwest region finding a solution that fits us best.

F: Now that it appears FERC's standard market design is diluted and delayed, in what direction do you think FERC should move with SMD?

PK: I think FERC should continue down the path of regional deference and should continue encouraging regions to work toward resolving their seams issues with adjoining markets. The goal of SMD-standardized, efficiently operating markets producing just and reasonable rates-is a worthy one. However, regional markets throughout the United States are unique in the makeup of their loads and resources, and each region has a history of business practices for the trading, transporting, and delivery of power. These unique regional characteristics must be accommodated and should not be ignored in any effort to design efficient electricity markets.

The West has a long history of interconnection-wide,