How far do states rights go in transmission planning?

The energy industry, coming off a remarkably difficult few years, had to deal with the huge Aug. 14 blackout, the ramifications of which have now reached regulatory policy. By putting transmission planning and reliability in the spotlight, the blackout could boost merchant transmission owners, as regulators and politicians scramble to make sure such an event does not happen again.

Commission Watch

Irregular seams affect ratemaking policies.

In a case that marks the first time the Federal Energy Regulatory Commission eliminated inter-RTO rate pancaking, the commission in late July issued an order terminating regional through-and-out rates (RTORs) charged by two regional transmission owners (RTOs)-Midwest Independent System Operator (MISO) and PJM Interconnection. The decision removes an estimated $250 million in yearly fees collected by those two entities.

The grid does not need a Marshall Plan for new investment.

We don't know what caused the Aug. 14 blackout, but somehow we know that our transmission system needs $50 billion to $100 billion in investment and upgrades. And utilities need higher returns to raise that kind of money. Talk about making lemonade out of lemons.

The reality is that we aren't short $50 billion or $100 billion in our transmission system. The study said to support that proposition just doesn't do the job.

We ask merchant grid developers if anything can ever be done.

 

The blackout of August 2003 should have come as no surprise. The Department of Energy's May 2002 National Transmission Grid Study finds growing evidence that the U.S. transmission system is in urgent need of modernization.

With just a few changes in reliability rules, regulators could call on consumer loads to boost power reserves for outages and contingencies.

 

In proposing a standard market design (SMD), the Federal Energy Regulatory Commission (FERC) makes clear that it wants customers to participate in wholesale power markets, such as by bidding an offer to curtail consumption, increase supply, and reduce upward pressure on prices.

"We believe in the direct approach of letting demand bid in the market," says FERC.

New Positions:

The Allegheny Energy Inc. board of directors named Florida Power & Light Co. President Paul Evanson its new chairman, replacing the retiring Alan J. Noia. Allegheny's interim president, Jay Pifer, assumed the duties of COO at Allegheny. Evanson had been with Florida Power and Light since 1992. He will be replaced temporarily by Lew Hay, chairman and CEO of FPL Group, until a permanent replacement is found.

New Hires:

Progress Energy shareholders re-elected Edwin B. Borden, James E. Bostic Jr., David L. Burner, Richard L. Daugherty, and Richard A. Nunis as Class II directors of the company. They will serve three-year terms.

Maryland Gov. Robert L. Erlich Jr. named state delegate Kenneth D. Schisler chairman of the Maryland Public Service Commission. Schisler succeeds Catherine I. Riley.

New Hires:

Progress Energy shareholders re-elected Edwin B. Borden, James E. Bostic Jr., David L. Burner, Richard L. Daugherty, and Richard A. Nunis as Class II directors of the company. They will serve three-year terms.

Maryland Gov. Robert L. Erlich Jr. named state delegate Kenneth D. Schisler chairman of the Maryland Public Service Commission. Schisler succeeds Catherine I. Riley.

PJM would dictate grid expansion, even if not needed for reliability, and then push the cost of the upgrades on those who use them the most.

Chairman Pat Wood and his Federal Energy Regulatory Commission (FERC) may well have given up on attempts to impose a standard market design (SMD) on the electric utility industry, but that doesn't mean the nation's grid system operators won't try the same thing.