A couple weeks ago, on a beautiful Sunday morning, I picked up my briefcase and wandered down to the Potomac river shoreline to catch up on my summer reading list. There, on the Virginia side, gazing across the river at the Lincoln Memorial, Washington Monument, and Capitol dome, I gathered strength to tackle a foot-high mound of paper. Buried inside were comments filed by a dozen-plus utilities and industry groups on the Notice of Proposed Rulemaking (NOPR) on electric transmission and stranded investment issued last March by the Federal Energy Regulatory Commission (FERC).
I started to plough through it: Commonwealth Edison (Edison), Pacific Gas & Electric (PG&E), San Diego Gas & Electric (SDG&E), Southern California Edison (SCE), Wisconsin Power & Light (WP&L), Edison Electric Institute (EEI), Electric Generation Association (EGA), National Independent Energy Producers (NIEP), American Public Power Association (APPA), National Rural Electric Co-op. Association (NRECA), Electric Consumers Resource Council (ELCON), Transmission Access Policy Study Group (TAPS), and the Louisiana Energy & Power Authority (LEPA).
I was still reading 12 hours later when the mosquitos and jet exhaust sent me home.
The FERC NOPR essentially creates a new "wires" business in electric transmission. Where do the boundaries lie?
Edison argues that "Most of the ancillary services identified in the NOPR are generation services," and thus should not play a role in comparability. Edison says competitors will "game" the system if transmission owners must devote a portion of generation to ancillary services: "For example, a transmission customer may obtain generation ancillary services at FERC-regulated rates, freeing its own generation for sale at market-based rates."