(November 2008)Economic uncertainties are raising doubts over utility returns. Will regulators feel the need to consider broader economic effects when engaging in ratemaking? While...
FERC says it won’t ‘change’ the native-load preference, but don’t bet on it.
with the Iowa Association of Municipal Utilities had offered more evidence. She ran down a list of what she called "horror stories," involving attempts by small municipal systems in the Upper Midwest to gain grid access to economic power resources.
In a statement appended to her oral testimony, she highlighted in particular an attempt by three small Iowa cities, located within the control area of Mid-American Energy, and currently served by MEC, to go out into the market in search of competing power-supply bids. The low bidder, she reports, was the Municipal Energy Agency of Nebraska (MEAN), which she says submitted 10-year reservation requests for transmission service to MEC and the Midwest ISO (MISO). Of the three cities (Callender, Buffalo, and Sergeant Bluff), she claims that only the latter was able to obtain grid service necessary to purchase 7 MW of MEAN’s Nebraska power.
In particular, Kimber questioned the accuracy of software employed to measure the possible impacts on various constrained flowgates.
According to the “scenario analyzer” used for MISO and the Mid-Continent Area Power Pool (MAPP), a regional reliability council), she reported, “transmission from MEAN to Callendar Iowa (0.6 MW) affected both the MAPP and MISO (Alliant) flowgates.
“Frankly,” she concluded, “it is hard to believe that a transmission request this small could cause such big problems.”
Testifying at the FERC conference, Kimber appeared pessimistic about the future.
“Several years ago,” she said, “I would have said that RTOs are the solution. But my recent up-close-and-personal experience with MISO convinces me that the cure is worse than the disease.
“MISO is extremely inflexible. With respect to Callender, even a 50-kW adverse impact on the flowgate foreclosed the transaction.” ( See, Written Statement of Anne Kimber, FERC Docket RM04-7, filed Dec. 7, 2004. )2
Ain’t Broke, Don’t Fix
Most of the nation’s traditional, regulated and vertically integrated electric utilities still governed by the OATT that have commented on FERC’s inquiry argue that, on the whole, the discrimination in transmission causes few, if any problems. They insist that the evidence of discrimination is either entirely lacking, or else only weak and anecdotal. Further, if any sort of radical change should prove necessary, some in this group would want native-load rights strengthened, rather than weakened, such as by creating a guaranteed enforceable physical right to long-term transmission as an overlay to the load-based network tariff, where rights follow need. (See Sidebar, “Grid Services and Native Load Rights,” p. 32.)
The Tennessee Valley Authority states the “ain’t broke” argument as clearly as any utility:
“In TVA’s experience, there are no longer problems associated with untimely processing of long-term transmission service requests.
“Improvements in the tools available to transmission providers … as well as an overall reduction in the number of requests being submitted … have combined largely to eliminate the backlog.”
Instead, these companies suggest that FERC should pursue only “surgical” and piecemeal changes to the tariff, including a number of fine-tuning adjustments that FERC itself has suggested in its notice. Examples are new grid products, such as “partial” or “conditional firm” transmission, or