This fight is for the heart and soul of regulation everywhere. The Federal Energy Regulatory Commission (FERC) won the first round on February 22, but I think there's more to come.
The fight involves incentives for nonutility generators (NUGs). It also touches on PURPA (em the Public Utility Regulatory Policies Act of 1978 (em which guarantees a market to cogenerators or power producers (QFs) who qualify. But more important, this battle involves regulatory philosophy. It pits electric utilities on the East and West coasts against the two commissions traditionally viewed as most supportive of NUGs.
You may recall last April, when the California Public Utilities Commission (CPUC) released its "Blue Book" proposal for electric restructuring, that the CPUC acknowledged conflict over the way electric utilities acquire generating resources. Thus, the CPUC proposed to eliminate the Biennial Resource Plan Update (BRPU) (em the process by which it requires major investor-owned electric utilities (IOUs) to buy power from renewable or favored generating sources, such as solar, geothermal, or wind energy. The CPUC said the BRPU would place utilities at risk for revenues from electric generation. All of this implied that before California embarked on a serious attempt at electric restructuring, including a competitive market for generation, it would at least consider ending regulatory incentives given out to NUGs for some resource categories.