The restructuring of electric utilities is fundamentally a matter of national policy (em not a regulatory issue. Regulators are ill-suited to make national policy because they are conditioned to act within the limits of authority specifically granted by legislation, rather than to seek a fresh statutory mandate in response to changed conditions. Policymakers must assess political, social, economic, technological, regional, and national factors to measure the need for reform.
Public Utility Regulatory Policies Act
In its recent Notice of Proposed Rulemaking (NOPR) on wholesale competition and open-access transmission,1 the Federal Energy Regulatory Commission (FERC) has outlined a plan to revolutionize the electricity industry.
Metropolitan Edison Co. (ME) and Pennsylvania Electric Co. (PE), subsidiaries of General Public Utilities Corp. (GPU), have asked the Federal Energy Regulatory Commission (FERC) for rehearing on parts of its July 6 order, which the two companies had challenged under the Public Utility Regulatory Policies Act in Pennsylvania (Docket No. EL95-41-000).
Specifically, the utilities had challenged the Pennsylvania Public Utility Commission's (PUC's) method of using a coal plant proxy to calculate a default level of avoided costs.
For almost a decade now, the Federal Energy Regulatory Commission (FERC) has pursued the goal of promoting competition in bulk-power markets, focusing on access to transmission as its primary tool to achieve that end. This trend first emerged in the 1987 PacifiCorp merger case. It gained momentum with the strong message sent by the Congress in the Energy Policy Act of 1992 (EPAct).
The profound changes now occurring in the electric industry will most directly affect those who are engaged in the enterprises of generation, transmission, and distribution of power. But challenges and opportunities confront gas companies as well. Certainly, the electric industry will continue to influence markets for gas: both in bulk fuel supply and in retail energy.
The Massachusetts Supreme Court has overturned a decision by state regulators that would have allowed Commonwealth Electric Co.
(R-CA) in a letter attacking the Federal Energy Regulatory Commission's (FERC's) February 22 decision that the California Public Utility Commission's resource auction violated the Public Utility Regulatory Policies Act in failing to consider all sources in setting avoided costs. The letter opposes what it labels the FERC's attempt to overturn California's Biennial Resource Plan Update (BRPU).
federal-state tensions currently affecting energy regulatory policy in America.
One need only reflect upon the primary sponsors of current efforts to repeal section 210 of the Public Utility Regulatory Policies Act of 1978 (PURPA) to begin to understand the folly of these efforts for the nation. The sponsors do not represent electricity ratepayers, who are claimed to be overpaying billions of dollars as a result of PURPA.
The Federal Energy Regulatory Commission (FERC) has upheld its February 22 ruling that the California Public Utilities Commission (CPUC) violated federal law by not considering all electric power sources in determining the avoided costs of electric utilities (Docket Nos. EL95-16-001 and EL95-19-001). A unanimous FERC had found the CPUC's Biennial Resource Plan Update auction in violation of the Public Utility Regulatory Policies Act (PURPA).