State PUCs
ISO GUIDELINES. Marking a contrast with California, but lining up with states in the Northeast, the Iowa Utilities Board has urged that independent system operators should have authority to order redispatch to help fulfill service requirements for electric transmission. That rule came as part of a set of principles issued by the board to guide the formation of ISOs in managing electric transmission systems and preventing the exercise of market power.
FORCING A DIVESTITURE SHOULD REMAIN AN OPTION for regulators in a clear case of market power abuse, NARUC members have agreed.
NARUC's executive committee also has opened discussion on a five-year business plan that would increase the association's visibility, improve its technology and make better use of the $10 million it has in reserves.
Members at the National Association of Regulatory Utility Commissioners summer meetings in Seattle, Wash., asked states to give them "clear and adequate authority" to protect consumers from market power.
No one has yet explained why the electric industry needs independent system operators to manage the transmission grid and a private institution to do essentially the same thing.
That question remains unanswered even now that the North American Electric Reliability Council has released its draft legislation showing how it would recreate itself as NAERO, a self-regulating electric reliability organization insulated from antitrust scrutiny by governmental oversight.
"Reliability does not exist in a vacuum," noted P.R.H. Landrieu, v.p.
FOR YEARS NOW ARGUMENTS ABOUT WHETHER RETAIL electric competition would benefit consumers and would serve the public interest have raged. Often saying there is little to be gained from competition and many dangers, powerful voices have urged opposition to competition or a glacial schedule for implementation of customers choice.
The Pennsylvania electric restructuring cases, however, should help end the arguments about the benefits of retail electric competition.
THE BOARD OF DIRECTORS of Virginia Power elected James A. White to the position of senior vice president, human resources. White previously served as senior vice president, human resources for the investment management group of Cigna Corp. He will replace Tom O'Neil, who retires after a 33-year career with the company.
Sen. Frank Murkowski (R-Alaska) announced the appointment of Tina Kreisher as communications director of the Senate Committee on Energy and Natural Resources. Kreisher previously served as deputy director of the Washington d.c. office of Gov.
SEVERAL YEARS AGO, ENGINEERS AT AMERICAN ELECTRIC Power measured the transfer capability or transmission capacity (in this article we will use the terms interchangeably) between AEP and Commonwealth Edison. Using traditional methods, they found that the winter transmission capacity that year was 3,500 megawatts.
Then they performed a more exhaustive and nonstandard analysis. It showed that during the month of January, transmission capacity actually varied from a low of 1,600 MW (less than half the nominal amount) to a high of 6,000 MW (70 percent higher than nominal).
DURING THE WEEK OF June 22 there was a major imbalance between supply and demand for electricity in the Midwest. Although demand was high enough to set a few records, the real problem may have been the lack of supply. Many generators were out of service and a few marketers reneged on contracts to deliver power. Market prices for bulk power allegedly soared as high as $4,000 per megawatt-hour. The industry was left in an uproar over these volatile prices, especially since a competitive market has been touted as a means to achieve lower prices, not higher ones.
FERC
MIDWEST POWER PRICES. Federal Energy Regulatory Commission Chairman James Hoecker announced July 15 that as soon as the staff presents its findings, the FERC will deal with the complaints filed by Cinergy, Steel Dynamics Inc., and others asking for regulatory relief from the late June run-up in Midwest bulk power prices (as high as $7,500 per megawatt-hour), and for a price cap set at $100/MWh. Nevertheless, Hoecker advised that the FERC was in "no hurry," and that the remedies available to it were not entirely clear. Docket No. EL98-53 (Cinergy), filed June 29, 1998; Docket No.
State PUCs
STRANDED COST RECOVERY. The Pennsylvania Public Utility Commission allowed Pennsylvania Power & Light Co. to recover $2.9 billion of a requested $4.5 billion in stranded costs, cutting a higher $4-billion allowance proposed earlier by an administrative law judge. The utility petitioned for reconsideration on June 26, after CEO William F. Hecht had called the decision "unacceptable," and noting that the PUC's written order, received June 15, appeared "even more injurious" to the company that the PUC's June 4 bench order.
THE PRICING TURMOIL THAT STRUCK MIDWEST POWER markets during the week of June 22, with allegations of price gouging and calls for a wholesale price cap imposed by the Federal Energy Regulatory Commission (see Docket EL98-53), made for good copy but has obscured what's really going on.
"In the pleadings to FERC, I saw no evidence of price gouging," says attorney Jeffrey Watkiss, who represents power marketers who have asked the Commission for wholesale market reform.