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FERC's Full Plate

A look at issues facing the commission for the coming year.

Fortnightly Magazine - January 2012

as offering greater protection against anticompetitive mergers: “The 2010 guidelines establish a foundation for greater enforcement by supporting narrowly defined markets, looking to potential harm to localized competition, and they place new emphasis on the importance of analyzing profit margins.”

Reliability Wars

Back in November, on the eve of a technical conference held at the FERC late last year to examine the effects of probable new EPA regulations on electric system reliability, Commissioner Philip Moeller asked conference speakers and grid system experts from across the industry to supply some “hard” and “real” evidence of possible reliability issues:

“The debate over EPA and reliability,” Moeller said, “is too often a debate lacking in substance.”

He urged the industry to “move the debate away from mere allegations,” and into substantive analysis.

And that likely will be FERC’s main goal during the coming year: to keep the dialogue focused on megawatts, transmission constraints, and load pockets, and away from politics. Yet that might prove difficult, given the apparent intent of Congress.

On November 22, the House Committee on Energy and Commerce instructed FERC Chairman Jon Wellinghoff to report back on whether FERC had analyzed the impact of EPA’s power sector rules on energy prices, capacity prices, and transmission rates. The committee ordered the chairman to hand over any and all documents “in your possession” responsive to the issue, including emails, instant messages, cables, flash drives, thumb drives, memory sticks, CDs, pamphlets, newpapers, and magazines. And these were to be produced “in the order in which they appear in your files and … not rearranged,” and without separating any documents already “stapled, clipped, or otherwise fastened together,” or disturbing any “file labels, dividers, or identifying markers.”

Searching for another climategate?

Testifiying at a conference at FERC in late November, the Midwest ISO’s Clair Moeller, vice president for transmission asset management, described as a $30 billion headache for MISO, with owners having to remove units from service to install new control equipment or to replace capacity outright.

“As a result,” he said, 62,000 MW of coal units could potentially be unavailable for reliability purposes — all at the same time.”

Moeller expressed support for the “safety valve” concept proposed at EPA by MISO, PJM, ERCOT, the New York ISO and the Southwest Power Pool, with RTOs working with the EPA to extend compliance deadlines for affect units critical to reliability. (See Ten Cases to Watch, item #1.) But as the National Mining Association warns, that would leave “virtually no role” for state regulators.

One such is Ohio utility commissioner Cheryl Roberto, who reminded FERC in her conference comments that “Ohio is a coal state.”

“It is the public policy of the state,” she added, to help foster the “increased, environmentally sound use of Ohio coal.”