News Digest

Fortnightly Magazine - August 2000

News Digest

EES North America


Transmission & ISOs

Florida RTO. Commenting on plans to create a regional transmission organization (RTO) for the state of Florida, a coalition of stakeholders issued a white paper on June 13, questioning whether the RTO would comply with the Federal Energy Regulatory Commission's Order 2000, and in particular asking for more detail on possible conflicts of interest within any future RTO board of directors.

"In general, there is insufficient detail to ascertain whether the Board of Directors' provisions meet the requirements of Order 2000," said the coalition, which includes such diverse companies as Calpine Eastern, Duke Energy North America, Tampa Electric Co., Enron, and Seminole Electric Co-op.

The object of concern was yet another white paper proposal by Florida Power & Light Co., "Proposal for Governance of Florida Transco/RTO," issued May 16.

The coalition also said that a member of the board of directors should be required to sell within six months any stock he or she owned in a market participant under all circumstances. The FPL proposal contains a similar provision, but would allow the director to hold the stock if it is "depressed." The coalition also wants to put a cap of 5 percent on a market participant's ownership interest in investment banks or funds having a financial stake in the RTO.

Meanwhile, Florida Progress Corp. earlier this year had proposed a separate Florida RTO as a feature of its pending merger with Carolina Power & Light Co. (CP&L has said that if the Florida RTO doesn't fly, it will consider joining the Midwest ISO instead.)

Bill Basford, a consultant to Enron and participant in the process, said that it is generally understood that Florida Progress is involved with the proposal at least indirectly, in the sense that FPL is trying to accommodate Florida Progress. "You can tell by the presentation" of the proposal that Florida Progress is part of the process, Basford said.

First Refusal Rights. The FERC clarified provisions of its open access transmission tariff under Order No. 888, explaining that when transmission customers see their long-term contract rights expire, and then seek to invoke a right of first refusal to renew their rights, they must give 60 day's notice, as required for initial applications under the tariff.

Mountain West ISA. In calling on applicants Nevada Power and Sierra Pacific Power Co. to "'fess up," the Southwest Transmission Dependent Utility Group-comprising small utilities in Arizona and Southern California-has questioned whether the Mountain West Independent Scheduling Administrator is only an interim step on the way to a merger with the neighboring Desert STAR Independent ISO, as first planned, or whether it will take on a life of its own.

Thus, after seeing the ISA's latest tariff documents filed June 6, the Arizona utilities asked the FERC to reconsider the "lighter touch" it had been applying to the ISA's approval process in favor of FERC's more comprehensive standards for RTOs required in Order 2000.

The Arizona group questioned the sincerity of the Mountain West applicants in intending their ISA to be an "interim arrangement" before merging with