Off Peak

Fortnightly Magazine - December 1999
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What we're not arguing about is important too.

More than 200 organizations and individuals have staked out positions in comments filed with the Federal Energy Regulatory Commission, in response to its proposed rulemaking on regional transmission organizations (RTOs).

The major debate in the reply briefs is on three issues.

Mandatory vs. Voluntary Participation? The FERC's proposed rulemaking relies on strong RTOs rising spontaneously from the primeval murk of the conflicting interests of the states and industry participants. Some respondents want the FERC to take a stronger hand.

Who Will Own and Govern RTOs? The FERC wants "independence." The respondents debate how much is needed.

Who Writes the Tariffs? Some respondents support the FERC's proposal that the RTOs have independent authority to set transmission tariffs. Others say that an attempt to take authority from transmission owners could be highly litigious.

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What's largely missing from the debate is whether the RTO concept would meet the FERC's underlying objectives (efficiency, equity, etc.). Most parties seem to assume that RTOs will be created in some form, and are fighting for the form that favors them the most.

So what should we be addressing?

Efficiency. We have given enormous forfeits to create competition, and should ask whether the RTO approach will help create enough efficiency to recover them.

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