Exposing Myths on what the FERC Really Wants

Fortnightly Magazine - March 1 2000
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Read the RTO Rule. You'll see that it paves the way for transcos.

On Dec. 20, the Federal Energy Regulatory Commission hit the streets (both Wall and Main) with Order 2000, its rule on regional transmission organizations (RTOs). Ever since, utilities, investors and their advisers have been poring through the 727 pages of the document. They want to know, "What does the FERC really want?"

The question is not simply academic. On March 1 in Cincinnati, the FERC will open the first of five collaborative workshops to explore the RTO Rule and help the industry respond. Other workshops will follow: in Philadelphia (March 15-16), Las Vegas (March 23-24), Kansas City (March 29-30) and Atlanta (April 5-6).

Nevertheless, even as we look forward to the collaborative process, some in the industry with an ax to grind have already jumped the gun, offering their own interpretations of the RTO Rule and what the commission wants and intends, with varying degrees of accuracy.

Winston Churchill once wrote that a lie travels halfway around the world before the truth can pull on a boot. Myths move fast, too. Yet we hope to help the industry start walking along the proper path.

In this article, we touch on some of the major points of contention over Order 2000 - myths we have heard about the RTO Rule and the FERC's expectations. To do that, we make a reasoned effort to debunk the top 10 myths about Order 2000 (giving page citations to the original text to buttress our points). We list the myths in descending order of the degree of currency attained by each. Beyond that, we rely only on the power of sunlight - "the best disinfectant," as Justice Brandeis would say.

Myth No. 1: Volunteer ¼ or Else!

Reality: or else the market will pass you by

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