ON OCT. 31, 1997, ENTERGY CORP. AND 16 OTHER MEMBERS
announced their intention to withdraw from the Southwest Power Pool regional reliability council and join the neighboring Southeastern Electric Reliability Council. The announcement shocked the SPP and its members, plus other industry observers and stakeholders.
While significant in number, the withdrawals do not necessarily signal widespread displeasure with SPP's initiatives and performance. Of the members leaving the SPP, nine indicated they were leaving on account of mergers, high costs or that their affiliates would still belong to the SPP. Five of the nine were Entergy operating companies. St. Joseph Power & Light Co. had announced its intention to withdraw in September, a month earlier. The potential financial uncertainty caused by Entergy's exit may have spooked the remaining six.
Events of this nature do not occur often in the electric power industry. They carry strategic implications (em both for utilities and for industry institutions, including the regional councils that make up the North American Electric Reliability Council, or NERC. They may also expose conflicts between utilities and regional councils. On the surface, such conflicts may appear benign, involving nominal issues such as trading patterns or degree of interconnection. Underneath it all, however, may lie more important issues, such as who will retain control over (or earn a profit from) the operation of electric transmission lines.
Prologue: NERC Strategy, Pool Politics
Recognizing the imminent arrival of open access, unbundling and competition, the senior industry executives who constitute the NERC leadership had already taken initiatives to encourage broader participation and set reliability, performance and monitoring standards with "teeth."