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Letters to the Editor

Fortnightly Magazine - February 2007

is not true that a utility granting access to its (re)dispatch would require them to be “insensitive” to “concerns of state regulatory commissions.” Nothing about offering redispatch service to third parties changes any element of state versus federal jurisdiction. And as long as the utility prices the redispatch service correctly (as is done by RTOs), then utilities providing that service are made whole for the legitimate costs of providing the redispatch.

• Finally, SMUD claims that a requirement that non-RTOs offer redispatch service would go beyond the scope of the FERC Open Access NOPR. Yet the NOPR already contains proposals for expanding redispatch service. But even if that were not true, if FERC found undue discrimination in the denial of an essential transmission service ( i.e., redispatch), then FERC would have a statutory obligation to remedy that undue discrimination, either in the current NOPR or in another proceeding. SMUD’s claim is therefore beside the point.

There are many details that warrant further discussion. But it is essential that the conversation FERC has initiated be consistent with the realities of actual grid operations and the physics of the grid. FERC shouldn’t embrace the undue discrimination that continues under FERC rules, and parties who claim that remedying discrimination would cause the sky to fall should be challenged to explain their claims. So far, FERC’s NOPR proposals fall short of even this minimalist threshold. Public Utilities Fortnightly performs a substantial public service by informing its readers and keeping on the pressure for an intellectually coherent discussion of transmission service that recognizes the essential aspects of dispatch.

John D. Chandley, Principal, LECG LLC

William Hogan, Harvard University


To the Editor:

In “An Inconvenient Fact ,” Public Utilities Fortnightly suggests that “standard market design” is rising from the ashes in the guise of proposals variously dubbed “open dispatch” and “transparent dispatch.” FERC’s request, as part of its Open Access Transmission Tariff (OATT) reform rulemaking, for supplemental comments on the Transparent Dispatch Advocates’ (TDAs) proposal, attests to the seductiveness of these real-time redispatch proposals, particularly the TDAs’ seemingly kinder, gentler version. Who wouldn’t want to get more use out of the frequently constrained grid? What could be bad about requiring transparency in the real-time costs of redispatch? Why not rely on bids to ensure the most efficient real-time redispatch?

From my perspective representing transmission-dependent utilities (TDUs), I am very sympathetic to the underlying concerns that appear to be driving the TDAs’ proposal. TDU efforts to secure reliable, predictable, and affordable power-supply arrangements are too often frustrated by claimed lack of transmission availability. However, the TDAs’ proposal, which would require transmission providers to post real-time redispatch cost estimates, accept third-party redispatch bids, and choose the lowest bid that could most effectively clear a constraint ( i.e., operate a real-time bid-based market at congested locations), is not the answer. Because of “inconvenient facts” not adequately addressed by the TDAs’ proposal, it will not achieve the goals espoused by its advocates and, if adopted, would amount to a major, costly, and complicated detour from the course set by