The jurisdictional battle over authorizing rejection of wholesale power contracts continues.
The high stakes turf battle over whether FERC or the federal bankruptcy courts have jurisdiction over rejecting wholesale power contracts is now in its third round. Round one was fought in 2003 in the NRG bankruptcy case and ended in a settlement among the parties. Round two followed with the Mirant Chapter 11 case. Now punches and counterpunches are flying in round three: the Calpine bankruptcy.
The nation’s first energy “top cop” and his colleague discuss important compliance implications of EPACT 2005.
By William F. Hederman Jr. and George D. Billinson
In its March 2005 report to the House Energy and Commerce Committee, the Federal Energy Regulatory Commission (FERC) repeated its request for enhanced civil penalty authority. When Congress passed the Energy Policy Act of 2005 (EPACT), it granted FERC all the authority that it had requested, and more. The new director of FERC’s Office of Market Oversight and Investigations (OMOI) called the new penalty authority “awesome.”1
Incentives for transmission investment could boost postage-stamp pricing over license-plate rates.
FERC proposed a new set of regulations, under the new section 219 of the Federal Power Act, explaining in broad outline how it might approve generous financial incentives for new investments in transmission—incentives once dubbed as “candy.” As of mid-January, the new NOPR had spawned more industry comment than just about any other FERC proposal in recent memory.
The absence of long-term transmission rights could exclude potential competition—and cause higher electricity costs.
Power-industry restructuring redistributed financial uncertainties that discourage generation investment and ultimately raise the price of electricity to consumers.
Interchangeability issues threaten to delay vitally needed LNG projects.
Jake Dweck and David Wochner
Gas composition issues have become a significant hurdle for the industry. Resolving these challenges will not be easy, requiring all stakeholders to apply a thoughtful approach to understanding the issues.
The Energy Policy Act of 2005 makes human resource challenges even more significant.
Hidden in the 1,700-plus pages of the Energy Policy Act of 2005 is a set of regulatory requirements that will redefine the technology, leadership, training, culture, compensation, job design, and organizational models currently employed in the industry.
The North American Electric Reliability Council should be promptly certified as America’s electric reliability organization.
To create the strong electric reliability system envisioned by Congress, FERC needs to focus on many issues, two of which are especially important: creating consistency in how compliance and enforcement programs are carried out at the regional level, and leading the transition—effectively and promptly—from today’s world to the new era called for in EPACT.
Congress renews PURPA’s call for conservation and load management, but the world has changed since the 1970s.
The “N-word” in the title first appeared in this journal more than 20 years ago, courtesy of the celebrated environmentalist Amory Lovins and his widely quoted piece, “Saving Gigabucks with Negawatts” (Fortnightly, 1985). Scroll forward a few decades. With restructuring of wholesale electric markets at FERC, plus formation of regional transmission organizations and independent system operators, the game was changed.
FERC this year must select a reliability czar. But the obvious choice could prove less than ideal.
Richard Stavros, Executive Editor
NERC up until now has been, in its own words, “a self regulatory organization, relying on reciprocity, peer pressure, and the mutual self-interest of all those involved in the electric system.” Nevertheless, can this tradition of kind, gentle, and voluntary consensus-building stand NERC in good stead as it seeks to transform itself in to a steel-fisted czar that would enforce mandatory standards?
We must efficiently deliver wholesale power within competitive regional markets.
When President Eisenhower was growing up in Kansas, he saw America’s byways and back roads develop to meet point-to-point needs, eventually forming a loosely connected national interstate highway network. The U.S. electric transmission system has similar roots, and it needs a similar vision to meet the needs of the 21st century.