The Midwest ISO struck a deal with utilities from low-cost states, but it may backfire.
Why should low-cost states get excited about handing over a chunk of their utility assets to an independent system operator (ISO) or other qualifying regional transmission organization (RTO)?
They might buy in if the ISO offers enough of an incentive.
Read the RTO Rule. You'll see that it paves the way for transcos.
On Dec. 20, the Federal Energy Regulatory Commission hit the streets (both Wall and Main) with Order 2000, its rule on regional transmission organizations (RTOs). Ever since, utilities, investors and their advisers have been poring through the 727 pages of the document. They want to know, "What does the FERC really want?"
The question is not simply academic. On March 1 in Cincinnati, the FERC will open the first of five collaborative workshops to explore the RTO Rule and help the industry respond.
Do not mistake the FERC's professed neutrality on what works best for regional transmission organizations.
In its final rule on regional transmission organizations, known as Order 2000,[Fn.1] the Federal Energy Regulatory Commission said it would not dictate to the electric utility industry whether and how to form RTOs. Don't be misled. The FERC claims to be agnostic,[Fn.2] but it still has a vision. And that vision leads inexorably to one conclusion. The preferred form for an RTO is the independent system operator, or ISO.
"Sensible Approach" or Misguided Meddling?
The proposal by Reps. Franks and Meehan to sell federal power at market rates provokes conflicting responses from readers.
I am writing in response to an article written by Reps. Franks and Meehan entitled, "The Sensible Approach: Federal Power at Market Rates," published in the Nov. 1, 1999 edition of Public Utilities Fortnightly (see pp. 44-47). I agree that it is outrageous that electricity services for people in the Northwest are subsidized (regardless of the customers' ability to pay) by the rest of the people in this country.
Mergers & Acquisitions
NSP + New Century. The Federal Energy Regulatory Commission OK'd the merger of Northern States Power Co. (NSP) and New Century Energies Inc. (NCE), to form Xcel Energy Inc., on condition that the new company would join the Midwest Independent System Operator. FERC Docket No. EC99-101- 000, Jan. 12, 2000, 90 FERC ¶61,020.
* Rate Pancaking. The FERC found no problem with transmission rate pancaking with the MISO condition, even though NCE subsidiary Southwestern Public Service Co. (SPS) belongs to the rival Southwest Power Pool.
How 165 lawyers were mostly on the wrong side in the biggest electric merger to date.
With Warren Buffet buying up MidAmerican Energy as his own personal utility, and Bill Gates taking a stake in Avista, the standard electric merger starts to look tame.
For that and other reasons, I believe it's all but certain that the Federal Energy Regulatory Commission will soon OK the electric industry's biggest-ever merger, combining American Electric Power Co. with Central and South West Corp.
How does each region manage congestion, allocate losses and dispatch resources? Which players gain the most from each approach?
The United States now has six independent system operators, five approved by the Federal Energy Regulatory Commission and one approved by the Public Utility Commission of Texas. These ISOs present an astonishing array of similar and conflicting rules and philosophies by which transmission services are defined and priced.
This article aims to explain some of the key similarities and differences among the ISOs' transmission pricing schemes.
California has a plan to track green electricity, but can it be trusted?
All electricity is the same, but the California Energy Commission wants to change that. It plans a system to authenticate the source of electricity to allow consumers to buy power from specific generators. Standard documents called "Certificates of Specific Generation" would certify financial transactions. Presumably, the plan would help document the authenticity of non-generic electricity products, such as green power.
Agency moves ahead despite ruling that Clean Air Act is unconstitutional.
By granting petitions filed by four Northeastern states seeking to reduce ozone pollution in their geographic areas through reductions in nitrogen oxide emission (NOx) from out-of-state sources, along with other initiatives, the Environmental Protection Agency on Dec. 17 began to clean the regulatory air that has grown murky as of late.
Reliant Energy's Don D. Jordan retired from his position as chairman of the board Dec. 31. R. Steve Letbetter, who had served as president and chief executive officer since June, has been named chairman, president and chief executive officer. Jordan served as CEO of Reliant Energy and its predecessor companies for 23 years, one of the longest tenures as a chief executive among major companies in Houston and in the energy business.
Matthew C. Cordaro has been appointed president and CEO of the Midwest Independent Transmission System Operator.