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Commission Watch

What everybody missed in setting up the regional grids.
Fortnightly Magazine - March 2005

so, that is, if Entergy's ICT first determines that the project is not part of its regional "base plan" to maintain reliability, but designed to make somebody else's rate cheaper. Yet, after the investor completes the project and pays the incremental rate, he attains privileged base-plan status ().

According to Entergy, all of this would occur within a protected, free-market, FERC-free zone. In the eyes of the law, transmission service would remain bundled with energy, so that the state PUCs get the last laugh and don't lose any jurisdiction.

To FERC's eyes, that would represent the ultimate in unintended consequences.

Regulatory Roundup

Resource Planning & Procurement California OK's long-term resource plans for the state's major investor-owned electric utilities, in the process adopting two controversial rules. First, in evaluating the cost of purchased power contracts extending 3 years or more, utilities should add in a 20% cost factor to reflect the damage done to balance sheets because debt rating analysts view such contracts as the equivalent of debt obligations. Second, in weighing the cost of fossil-fired generating resources, utilities must account for the damage done by global warming by tacking on a cost ranging from $8 to $25 per ton of expected CO2 emissions. Cal. PUC Decision 04- 12-048, Dec. 16, 2004.

Generation Behind the Meter PJM RTO issues status report that stakeholders are working on plan to permit municipal utilities and cooperatives-not just wholesale customers-to net any behind-the-meter generation against associated load to determine liability for charges for network transmission and ancillary service. Also, munis and co-ops could choose whether to count BTM capacity in full (w/o netting) in satisfaction of their installed capacity (ICAP) obligation. FERC Dkt. ER04-608-2, filed Jan. 3, 2005.

Wind Power Interconnections FERC proposes rules for wind power facilities to qualify for interconnection to the wholesale power grid, requiring wind facilities to maintain real-time SCADA communications capability with transmission providers, and to demonstrate the ability to continue operations to add stability to the grid even during a low-voltage emergency. FERC Dkt. PL04-15, Jan. 19, 2005.

Construction Contract Bidding California OK's rules barring utilities from using reverse auctions in soliciting bids for energy construction contracts - a procedure by which bidders compete for contracts by trimming their bids until the lowest bid is accepted. Cal. PUC Decision 04-12-056, Dec. 16, 2004.

Transmission Outages Citing unconstitutional interference with interstate commerce, a federal district court overturns Kentucky law that had required state's electric utilities to give priority to in-state native-load retail electric customers in deciding which service to curtail first to deal with an interruption or outage affecting intrastate wholesale power transmissions. Ky. Pwr. v. Huelsmann, Civ.A.3:03-47-JMH (E.Dist.Ky.), Jan. 18, 2005.

Fuel Cost Recovery Connecticut hikes rates for Connecticut Light & Power by 10.3 percent above level of January 2004, saying that need to recover rising costs of fuel can circumvent ongoing retail rate freeze. Conn. D.P.U.C., Dkt. Nos. 03-07-01RE04, 03-07-02RE05, Dec. 22, 2004.

Mitigation of Power Prices Federal appeals court overturns FERC order that had OK'd plan by NY ISO to mitigate wholesale power prices set in regional day-ahead auction