Jim Lundrigan, New Haven, Conn.: After reading Gordon van Welie’s article (“New England: A Critical Look at Competition,”) I couldn’t help but think back to California in 2000. Van Welie, who is president and CEO of ISO New England, is trying to feed the citizens of New England the same brand of malarkey that the California ISO fed the California Public Utilities Commission in 2000 when wholesale and retail prices in California were perfectly linked and nearly succeeded in bankrupting the wealthiest state in the country.
John S. Ferguson, Richardson, Texas: The article of Michael J. Majoros Jr. (“Rate-Base Cleansings: Rolling Over Ratepayers,”) attracted my attention, because I perceive it to propose a solution—PUCs’ need to recognize refundable regulatory liabilities—for a problem that does not exist.
Efforts to develop more RTOs in the West came to a near standstill again after talks last year among key players Bonneville Power Administration (BPA), Grid West, and the Transmission Improvements Group collapsed over BPA’s convergence proposal. The end of talks is one more failure in a long line of failures to find consensus on an RTO approach in the West. Grid West is attempting to reorganize following BPA’s withdrawal, but its fate is indeterminate. Key issues are funding for continued development and achieving agreements with BPA and other transmission providers in the region.
We must efficiently deliver wholesale power within competitive regional markets.
Michael G. Morris
When President Eisenhower was growing up in Kansas, he saw America’s byways and back roads develop to meet point-to-point needs, eventually forming a loosely connected national interstate highway network. The U.S. electric transmission system has similar roots, and it needs a similar vision to meet the needs of the 21st century.
With the dramatic growth of the liquefied natural gas (LNG) trade worldwide and increased dependence on LNG as the gas fuel of the future, gas-utility companies at the end of the chain need to question whether the LNG chains are still safe, reliable, and well managed. But before diving in to some of the risks, it should be pointed out that historically LNG chains have been safe.
The unclear language governing termination rights is subject to interpretation and extraordinary financial risk.
Brett Friedman and Justin Harlow
How does one determine the value of power contracts under early termination? Given the vagaries of the contracts themselves, the process is neither clear nor standard, and often results in protracted and costly litigation. Did the counterparty have the right to terminate in the first place?
FERC says it won’t ‘change’ the native-load preference, but don’t bet on it.
Bruce W. Radford
When FERC opened wholesale power markets to competition a decade ago in Order No. 888, it codified a system for awarding grid access known as the pro forma Open-Access Transmission Tariff (OATT), founded on physical rights, and on the fiction that electrons travel along a “contract path.” Should the commission “tinker” with the OATT, making only surgical changes to make it current? Or, do events instead warrant a complete overhaul?
Budgets are expected to increase, even as new IT challenges present themselves.
In our annual technology forum, we talk with tech/information specialists at four companies: Patricia Lawicki at PG&E; Ken Fell at the New York ISO; Mark C. Williamson at American Transmission Co.; and John Seral at GE Energy.
Miscellaneous distribution operations expenses totaled $878 million in 2004— the largest single element of the distribution operations expenditures. Greater integration of real-time data can bring such costs under control.
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