Planned or Private?

 

 

The case for participant-funded transmission.

There's not much funny about electric transmission. But that didn't deter James Pope, chairman of TANC, the Transmission Agency of Northern California, and director of Santa Clara's Silicon Valley Power, from trying out a little humor. Speaking at the Federal Energy Regulatory Commission in Washington, D.C., on Dec. 3, at the FERC's all-day technical conference on congestion revenue rights (CRRs), Pope managed to crack up the morning audience with the sort of wit that could come only from a veteran of California's utility industry:

"The only substitute for electricity," he offered, "seems to be darkness. And that's not a very good substitute."

Pope's quip might appear irreverent. Yet the key to success for FERC's standard market design (SMD) may well lie in deciding which electric industry assets are interchangeable, and what that means for regulation.

In particular, the evolution of locational marginal pricing (LMP) and other ideas in FERC's SMD have caused utilities and regulators during the past six months to warm to the idea of the electric grid as private property. This change in thinking comes from all over. It comes from the Northeast United States (New York, New England and PJM), as one might expect, where they love the SMD. But it also comes from the Southeast, where many disdain the notion of electric competition and newfangled markets. You could see the change as well back in November, at the FERC's prior conference on pricing policy for transmission network upgrades and expansions.