The latest dispute over PJM’s bidding rules has raised the level of uncertainty in organized electricity markets. Efforts at reform have created a market structure so jumbled that it can’t produce...
'T' Party Revolt
Transmission expansion costs are spread unevenly, driving a wedge between utilities and regions.
and unreliable transmission.”
Cudahy went on to quote from a 2004 opinion from the D.C. Circuit (affirming cost allocations in the formation of MISO) written then by the now-current U.S. Supreme Court Chief Justice, John Roberts. In that opinion, Roberts suggested that RTO-member utilities should share the cost of establishing and maintaining the grid system, even if all don’t benefit equally, just as all U.S. taxpayers help pay to sustain the federal courts:
“The MISO Owners’ position is tantamount to saying that if they are not a litigant, they should not be made to pay for any of the costs of having a court system.” (MISO Trans. Owners v. FERC, 373 F.3d 1361, at 1371, D.C. Cir. 2004.)
Attorney Karen Hill, vice president for federal regulatory affairs at Exelon, echoes these ideas in comments addressing the current MISO proposal. (See, Comments of Exelon, FERC Docket ER09-1431, filed Aug. 13, 2009.) Hill and Exelon urge FERC to fix the problem in a generic way that would cover the nation’s entire grid system. Hill even appears to question the usefulness of longstanding rate-making concepts, such as utility-specific peak load, and utility-specific resource adequacy.
“In Exelon’s view,” she writes, “this case illustrates perfectly why optimal development of the nation’s wind energy resources calls for interconnection-wide planning and cost allocation … There is no good case-by-case solution for the conundrum presented here. The commission is facing similar issues in other regions …
“Today, the national goal of developing renewable resources transcends the historic mission of an individual utility to secure an adequate electricity supply to serve its particular load over time.