Commission

The green power mind-set is locked in the wholesale world, clueless about what it takes to perfect real consumer products.

Even the FERC's own lawyers urge a new rule when a customer leaves a utility that already has too little capacity.

In a brief filed Aug. 18, staff counsel Theresa Burns and Diane Schratwieser urged the Federal Energy Regulatory Commission to rethink its policy on wholesale stranded costs when a customer threatens to leave but the utility is so short of generating capacity that it can easily make up any lost revenues by reallocating the reserves to other native load customers at prevailing, regulated embedded-cost retail rates.

State PUCs

Gas Capacity Rights. The New York PSC told retail suppliers that to serve firm retail gas load they must have rights to firm, non-recallable, primary delivery point pipeline capacity for the five winter months, November through March, or else must augment secondary capacity with a standby charge payable to local distribution companies holding primary rights.

With so much at stake, why don't utilities ask vendors for plug and play?

Everyone agrees that competitive retail energy markets need interoperable information systems. Otherwise, the high cost of switching proprietary metering and data communications systems could offset savings from customer choice. Standardization reduces the costs of automating operations - also crucial for competitive companies. Interoperable "plug and play" systems can free companies of dependence on expensive, single-sourced equipment. So why do most utility systems remain incompatible from vendor to vendor?

Consultant blasts national effort, says standards themselves are the problem.

Concerted efforts by utilities, retail marketers and metering companies to establish uniform business practices by implementing national electronic data interchange standards, or EDI, as part of retail competition, are being undermined by the EDI standard itself, says Doug Houseman, director at Cap Gemini Hagler Bailly.

"It is a very big, nasty, complicated monster. There are a lot of people that do not know what they are doing," he says.

Federal and state interests clash as the FERC battles California over the future of the state's power exchange.

The California Power Exchange will not outlive its four-year mandate because it cannot compete with lower-cost exchanges, such as the New York Mercantile Exchange, Automated Power Exchange and low-cost over-the-counter brokers. So says Edward Cazalet, chief executive officer at Automated Power Exchange and chief rival of the CalPX.

As the FERC ponders RTO structure, California's incumbent PX defends its unique design.

The great California debate - what role and structure for a power exchange? - once again is rearing its head, this time on the national scene. The resurgence of interest in regional transmission organizations, or RTOs, spurred by the recent Notice of Proposed Rulemaking[fn.1] issued in May by the Federal Energy Regulatory Commission, raises questions about the relationship between RTOs (designed primarily to manage grid operations) and power exchanges (seen as vehicles to facilitate trading).

News Digest was compiled by Carl J. Levesque, editorial assistant, Lori A. Burkhart, contributing legal editor, and Bruce W. Radford, editor. For continual news updates, see www.pur.com.Nuclear Power

Transmission & ISOs

Transco Independence. Granting Entergy's request for a declaratory order, the Federal Energy Regulatory Commission ruled in a case of first impression that a stand-alone transmission company ("transco") would meet the test in Order 888 for independent system operators despite passive ownership by a power producer or other market participant.

CMS Electric & Gas Co. named Frank Johnson vice president of international electric and gas distribution. He previously was the company's vice president of energy distribution.

J. Kay Smith was appointed vice president of corporate communications and public policy at Ameren Corp. Smith was promoted from assistant to the president for AmerenCIPS and manager of government affairs for Ameren Services.

Duke Energy International appointed David Weaver executive vice president for Europe.

MIT professor Paul Joskow asks the FERC how its rulemaking will help consumers.

By Aug. 23, the electric industry had filed over 150 separate comments - nearly 4,000 pages - telling the Federal Energy Regulatory Commission what it thinks about regional transmission organizations.

All other stories pale in comparison. The commission's proposed rulemaking on RTOs would reinvent the electric transmission business. The case gives economists a once-in-a-lifetime opportunity to instruct a government agency how to design and build a market from the ground up.