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Commission Watch

PJM/Midwest Market:
Fortnightly Magazine - December 2004

transmission rates billed for crossing service territory boundaries, whether imposed by the RTOs (regional T&O rates, or "RTORs"), or by the individual utilities. As part of the deal to remove the T&O pancakes, FERC promised to make utilities whole over the short term by allowing a compensatory and temporary true-up charge (the SECA, or "Seams Elimination Cost Adjustment"). And to craft the SECA, FERC opened a broad settlement process, aimed at unifying the transmission price structure across the entire MISO/PJM area.

Thus, some Unified Plan proponents see the Regional Plan, with its flow-based pricing, as creating a stealth substitute to the old regime of T&O rates. Instead of pancaked charges that apply when power crosses boundary lines between control areas and utility service territories, they see a new regime of voltage- and usage-based charges that will increase transmission rates for many ratepayers-leaving them no better off than before, when they paid T&O rates.

Regulatory Roundup

Path 15 Upgrade. California ISO (Cal-ISO) runs into opposition with its unprecedented plan in Tariff Amendment 63 to make the Western Area Power Administration (WAPA) a "partial" participating transmission owner in the ISO, in trade for WAPA's 10 percent capacity interest (150 MW) in the Path 15 upgrade. Utilities complain that WAPA will receive a 10 percent share of FTRs and congestion revenues, though PG&E and TransElect will have paid for 99.5 percent of the line construction costs.

Gas Bypass Pipelines. Oregon appeals court reverses a state public utility commission (PUC) order, says a group of industrial gas users would violate state law providing for exclusive utility franchise rights if it forms a cooperative to bypass the local gas distribution utility and construct a pipeline to deliver gas to its members at retail.

Power Line Communications. Federal Communications Commission (FCC) OKs new rules for BPL (Broadband Over Power Line) systems to create a competitive regulatory framework for the use of existing electric utility lines to provide high-speed communications.

Gen Station Power Needs. Duke Energy said it could support Cal-ISO's claim that it was "stretched thin," and wanted first to gather and study data from power producers before investing money to change its billing and metering protocols and software on netting of on-site station power against unit output. Duke had complained to FERC to force Cal-ISO to conform to FERC precedent to permit its Moss Landing units to net their draws of station power against output from any other unit under common ownership, even if not operating instantaneously, and even if the two units are not directly interconnected.

ISO Retail Service. The Maine PUC said it would not require the New England Power Pool (NEPOOL) or ISO New England (ISO-NE) to obtain a utility license to serve an individual consumer (MPEU, or "Market Participant End User") with generation supply taken directly from the New England regional wholesale market. But a private power producer, trader or affiliate who facilitates the deal would require a license as a competitive retail energy provider.

Renewable Energy Portfolios. California appeals court overturns state PUC order that required electric utilities to pay costs upfront