You might have thought the Feds closed the book on any broad, region-wide sharing of sunk transmission costs—especially after FERC ruled last spring in Opinion No. 494 that PJM could stick with license-plate pricing (LPP) for transmission lines already planned and built. If you thought that, you weren’t alone. Of 25 transmission owners (TOs) in the Midwest ISO (MISO), 24 voted recently to do the same for their market as well.

Commission Watch

PJM/Midwest Market:

Should transmission owners get paid extra for distance and voltage?

While the Midwest now appears set on competitive bidding for the electricity commodity, taking from PJM such tried-and-true elements as locational marginal pricing (LMP), financial transmission rights (FTRs), and a day-ahead market with a security-constrained dispatch, the region remains split over the pricing of transmission.

We ask merchant grid developers if anything can ever be done.

 

The blackout of August 2003 should have come as no surprise. The Department of Energy's May 2002 National Transmission Grid Study finds growing evidence that the U.S. transmission system is in urgent need of modernization.

The Federal Energy Regulatory Commission appointed Bud Earley policy advisor on electric matters. Earley most recently served as director of the electric policy division of the FERC's Office of Economic Policy. The FERC named Bobbie J. McCartney an administrative law judge. She previously served as deputy chief administrative law judge in the Social Security Administration's Office of Hearings and Appeals.

The Bonneville Power Administration named Jeff Stier its new vice president of national relations. Stier joins BPA after 12 years on the staff of Rep.

What the Supreme Court thinks about handicapping the incumbent to level the field for new players.

Regulators today sit on the horns of a dilemma: How far to level the field in the name of competition?

If regulators fear market power in the incumbent utility, and so impose restrictions on its activities and assets, they may impair its effectiveness and thus distort the very competition they attempt to foster.

News Digest was compiled by Carl J. Levesque, editorial assistant, Lori A. Burkhart, contributing legal editor, and Bruce W. Radford, editor. For continual news updates, see www.pur.com.Nuclear Power

Transmission & ISOs

Transco Independence. Granting Entergy's request for a declaratory order, the Federal Energy Regulatory Commission ruled in a case of first impression that a stand-alone transmission company ("transco") would meet the test in Order 888 for independent system operators despite passive ownership by a power producer or other market participant.

State PUCs

ISO GUIDELINES. Marking a contrast with California, but lining up with states in the Northeast, the Iowa Utilities Board has urged that independent system operators should have authority to order redispatch to help fulfill service requirements for electric transmission. That rule came as part of a set of principles issued by the board to guide the formation of ISOs in managing electric transmission systems and preventing the exercise of market power.

FERC

GAS PIPELINES. Noting a move toward shorter-term contracts since Order 636, the FERC on July 29 issued an "integrated package" of reform proposals for the natural gas pipeline industry: (1) specific measures in a notice of proposed rulemaking on short-term transportation (transactions shorter than one year); plus (2) an open-ended request for comments in a broader notice of inquiry. RM98-10-000, 84 FERC ¶61,985 [NOPR]; RM98- 12-000, 84FERC ¶61,087 NOI].

PIPELINE CONSTRUCTION. Chief Judge D. Brock Hornby of the U.S. District Court in Maine, decided to allow Portland Natural Gas Transmission System access to electric transmission corridors owned by Central Maine Power Co. The access will be used to install a natural gas pipeline.

Portland received FERC approval Sept. 24 for installing and operating a 292-mile, $302-million interstate pipeline. CMP owns about 70 miles of the electric transmission corridor. The preliminary injunction, issued April 10, gives Portland access to property on CMP-owned transmission corridors.