The Federal Energy Regulatory Commission (FERC) has rejected a proposed amendment to the NEPOOL agreement that would have 1) facilitated negotiation of energy-only transactions by and among pool members, and 2) eliminated an otherwise applicable rate discount for transmitting energy involved in certain of those sales (Docket No. ER95-1466-000).A key aspect of NEPOOL operations is sharing of reserves. Each member is assigned a capacity responsibility equal to its load plus a share of the pool's combined reserve requirement. The pool's combined reserve requirement is lower than the sum of the reserve requirements each member would have to individually maintain absent the pooling arrangements. Any member not meeting its capacity responsibility pays a charge for the capacity deficiency.
The amendment would have allowed NEPOOL members, under certain circumstances, to sell economy energy to other members in bilateral transactions without incurring a capacity deficiency. The new transactions would have eliminated the need to exchange capacity. However, the existing favorable transmission rates for sales from pool planned units (PPU) would not apply to these economy energy sales. The FERC denied the application, finding that NEPOOL offered no explanation to support the denial of reduced transmission rates for bilateral transactions involving PPUs. NEPOOL may refile with the appropriate information.
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