FERC

The Market Transition: Is FERC Pricing Policy on the Wrong Side of the Road?

In the United States, the Federal Energy Regulatory Commission (FERC) has undertaken the task of guiding the electric power industry from regulation to competition. But unless the FERC develops a plan to consider all facets of electric deregulation at the same time, we may end up driving on the wrong side of the road.

Last October the FERC issued its policy statement on electric transmission pricing. See, Inquiry Concern. Pricing Policy for Trans. Servs.

FERC Allows "Retroactive" Rates

The Federal Energy Regulatory Commission (FERC) has approved a settlement permitting potential refunds or surcharges by New England Power Co. (NEP) and Northeast Utilities Service Co. (NU) on deferred rate issues relating to transmission services provided on facilities collectively known as the "New Hampshire corridor" (Docket Nos. ER92-764-000 and ER92-766-000).

When NU merged with Public Service Co. of New Hampshire (PSNH), the FERC authorized PSNH to dispose of its jurisdictional facilities.

Pool Adds Transmission Distance Rate

The Federal Energy Regulatory Commission (FERC) has amended the Mid-Continent Area Power Pool (MAPP) agreement, adding a distance-based transmission service charge for short-term transmission services provided by MAPP members (Docket No. ER94-1529-000). Previously, MAPP members provided reciprocal short-term transmission services to each other, charging only for transmission losses.

MAPP wants to apply a distance-based transmission charge for wholesale coordination transactions of four years or less between pool members.

FERC Claims Power to Order Dam

The Federal Energy Regulatory Commission (FERC) has adopted a policy statement on hydroelectric plant decommissioning, claiming authority to deny new project licenses when existing licenses expire and to order owners to remove a dam during the relicensing process. These measures would only be applied if the FERC concludes that a project, no matter how many conditions were imposed, could no longer meet the comprehensive development standard of the Federal Power Act (FPA) (Docket No. RM93-23-000).

The statement was one of three hydroelectric orders considered as a group.

FERC Sets Guides for SO2 Emission Allowance Cost Recovery

The Federal Energy Regulatory Commission (FERC) has approved a policy statement and interim rule establishing guidelines for recovering the cost of sulphur dioxide (SO2) emission allowances in wholesale rates. The FERC also ruled that utilities do not need its approval to sell or transfer emission allowances, because allowances are related to electric generation, which lies beyond FERC jurisdiction (Docket No. PL95-1-000).

Power Marketers Flex at FERC

Electric utilities beware. Power marketers are not only here to stay, but their ranks are growing. The Federal Energy Regulatory Commission (FERC) logged approximately 100 applications in 1994, compared to nine in 1993. About half have been acted on already.

The fledgling industry is also staking out its regulatory territory. Notably, on December 14, the FERC ordered the Tennessee Valley Authority (TVA) to provide nonfirm transmission service to AES Power Inc.

People

Irl F. Englehardt, president and CEO of Peabody Holding Co. Inc., was elected to a two-year term as chairman of the National Coal Association. Steven F. Leer, president and CEO of Arch Mineral Corp., was elected vice chairman. Englehardt will be the 49th industry executive to serve as chairman in NCA's 77-year history.

Gerald E. Putman was made senior v.p. of a new customer service business unit at New York State Electric & Gas Corp.

Frontlines

In the energy industry, no question defies resolution more than electromagnetic fields (EMF).

The Edison Electric Institute (EEI) reported in late December that electric utilities have contributed close to $80 million for EMF research since the early 1970s. And new efforts are taking shape.

FERC Upheld on Municipal Preference for Hydro Licensing

The U.S. Court of Appeals for the District of Columbia Circuit has upheld a Federal Energy Regulatory Commission (FERC) finding that the municipal preference in hydropower project relicensing cases did not apply to "orphaned" facilities. Facilities are considered orphaned if the current license holder files a notice of intent to apply for a relicense, but then fails to file a timely application.