Commentary - The RTO Drafts: Major Revisions Needed

 

Seven suggested plots, but no bestseller.

Let's be charitable and call them first drafts-for they can be seen as nothing else. Like all first drafts, the seven RTO proposals filed at the Federal Energy Regulatory Commission last fall need lots of revision. Indeed, a couple may need to be thrown out entirely, since trying to revise them would be a waste of time. Still, there are nuggets throughout that are worth keeping and rolling into the final, FERC-approved entities.

To save readers the time and trouble associated with reading the drafts, we have compiled a CliffsNotes version of the proposals. These notes are particularly timely given that a second round of RTO proposals are due at FERC this month.

The regional transmission organization proposals in question were submitted by Southern Co.; Entergy and the Southwest Power Pool; GridSouth, a group of three southeastern utilities; GridFlorida, which includes the three principal Florida utilities; DesertStar, a group of utilities in the Southwest; RTO West, a group of nine, largely northwestern utilities; and The PJM power pool.

Ironically, the drafts do call to mind some aspects of the world's great books. Southern's proposal, for example, reminds us of Machiavelli's scheming "Prince," who justifies any action to remain in power.

1. SOUTHERN COMPANY. The proposed structure of Southern's RTO, which would include just the holding company's five utility subsidiaries for sure, underscores the company's desperate desire to remain in charge.