The three largest California investor-owned utilities (IOUs) (em Pacific Gas and Electric Co., San Diego Gas & Electric Co. (SDGE), and Southern California Edison Co. (SCE) have circulated for comment working drafts of future Federal Energy Regulatory Commission (FERC) filings concerning a deregulated electricity industry.
One 150-page proposal asks that operational dispatch control of transmission facilities be conveyed to an ISO, beginning January 1, 1998. Transmission services become available on a comparable basis, priced to reflect locational marginal costs (five pricing zones are anticipated). This proposal is premised upon full recovery of stranded costs through a competitive transition charge (CTC). The proposal also sets forth rules for ISO governance and operation.
A second proposal calls for authority to sell electricity at market-based rates through a Power Exchange (PX). Separate from an ISO, the PX would create a transparent spot market for electric generation, functioning as a clearinghouse by conducting an auction for generation and demand with hourly price signals visible to users and investors. The companies initially would be required to bid all their generation into the PX and to buy all their supply for full-service customers from the PX.
The third proposal asks the FERC to determine whether their facilities fit in the local distribution or transmission categories, and whether they are subject to state or federal jurisdiction. It also asks for a ruling that the Federal Power Act does not affect the jurisdiction of states to apply distribution charges to end-use customers, regardless of the voltage level of the grid facilities to which they are interconnected. That ruling would ensure that end-use customers are not able to evade state jurisdiction (em and state-administered transition cost charges (em by pursuing a direct connection to "transmission" facilities.
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