fw : ferc meeting summary the commission held its first open meeting with pat wood as the new chairman today and discussed many interesting issues . the following is a summary of the meeting . the meeting is still going on , and we will provide an addendum to this email updating you on what was discussed this afternoon ( regarding market power ) .
rtos
chairman wood expressed his desire to finish the rto transition , and that the commission needs to provide guidance and leadership in order to speed up the rto transition . chairman wood considers the rto effort on two tracks : 1 ) organizational - - what will the rto organizations look like , and 2 ) substantive - - once you set up the organizations , what will they do .
organizational effort : wood stated that this effort has already begun with the july 12 orders and the northeast and southeast mediation efforts . the commission will be issuing additional orders in the northeast , southeast and midwest within the next couple of ferc meetings . wood also stated that it is time for rto west and desert star to " marry up , " meaning , i suppose , that the two should consolidate . wood does not think that california can be included in the western rto yet since it has lingering problems .
structural effort : the commission will initiate a section 206 proceeding to address market design and structure issues in order to translate the 8 functions established in order no . 2000 into rto structures . to achieve this goal , the commission is establishing an " rto week " of advanced workshops , from october 15 - 19 , in advance of issuing a nopr , to address structural issues such as : congestion management ; cost recovery ; market monitoring ; transmission planning ; reliability ; transmission rights . wood also envisions that the commission will develop a new pro forma tariff to replace the existing order no . 888 transmission tariff . the new tariff will apply to all public utilities and rtos .
wood also recognized that some " sticks " are needed to entice rto participation . therefore , wood proposes to have all public utilities come in by december 15 , 2001 with a declaration to join an rto . if they do not make this declaration , these entities will have their market based rate authority revoked on a prospective basis . furthermore , wood states that if entities do not join rtos , they should not be authorized to merge their facilities , and that ferc will also look at their rates to determine whether they are still just and reasonable rates compared with rates offered by rtos . wood states that these " sticks " provide incentive , but do not mandate , rto participation .
with regard to the pending requests for rehearing , wood asked legal staff to figure out how " ferc can get there . " in other words , i think wood is telling them to develop the legal analysis for denying rehearing .
while commissioner breathitt is skeptical about some of these rto proposals , because she was not required to vote on anything today , she only expressed her concern .
upcoming dates
october 15 - 19 - - rto workshops
end of october - - further orders on northeast , southeast , midwest rtos
december 15 , 2001 - - all public utilities must commit to an rto or have their market based rates revoked
proposed rule for standards of conduct
within the next few days , ferc will be issuing a notice of proposed rulemaking ( " nopr " ) on standards of conduct for transmission providers . as explained at the meeting ( we do not have a copy of the nopr yet ) , the nopr will propose to apply standards of conduct uniformly to electric transmission providers and gas pipeline transportation providers similarly . the nopr also proposes to broaden the definition of affiliate to include all energy affiliates , not just marketers . the standards of conduct would not apply to rtos and transmission providers who are members of an rto may ask for an exemption from the standards .
the nopr will also likely include a proposal that the standards apply to transmission - owners ' marketing affiliates that are serving native load customers . as you know , the present standards do not apply to the affiliates of tos that are only buying and selling power for native load customers . as the interim general counsel noted , these marketing affiliates can go into the control room and have unrestricted interaction with the to .
there was some discussion of whether it is necessary to apply the standards to affiliates serving native load . staff told the commissioners that market participants have been complaining for years about this loop hole in the rules . pat wood said they will include the proposal in the nopr ( breathitt may not support ) , but if the industry does not support the proposal , ferc will pull it . we of course will strongly support the proposal .
provision of adequate electrical capacity ( icap )
chairman wood asked staff to prepare a presentation on reserves and installed capacity requirements . wood noted that the commission had to issue an order on icap in new england during their recess in august , and he is not that familiar with the issues . therefore , he asked staff to prepare a presentation , which they made at the meeting this morning . the presentation will be made public within the next couple of days . in sum , staff seems to believe that some type of icap requirement is needed for reliability .
after the presentation , wood noted that the new england icap order has enough wiggle room to allow the commission to change its mind once the commissioners better understand the issue . wood sees that there is a potential conflict between decentralized , competitive markets and the need for sufficient supply ( without politically unacceptable , prolonged price spikes ) .
commissioner brownell ( from the pennsylvania puc ) has a better understanding of icap and expressed concerns that icap may be an outdated tool that acts as a barrier to entry without any definable benefit to customers .
realizing that there are many positions on this topic , chairman wood said he will publish the staff report and ask for comments by october 17 . we will definitely submit comments on this and will include everyone in the drafting process .
sorry this is so long , but a lot happened today . we will provide a summary of the market power discussion as soon as it is over . let us know if you have any questions .
sarah
fw : ferc meeting summary
the commission held its first open meeting with pat wood as the new chairman today and discussed many interesting issues . the following is a summary of the meeting . the meeting is still going on , and we will provide an addendum to this email updating you on what was discussed this afternoon ( regarding market power ) .
rtos
chairman wood expressed his desire to finish the rto transition , and that the commission needs to provide guidance and leadership in order to speed up the rto transition . chairman wood considers the rto effort on two tracks : 1 ) organizational - - what will the rto organizations look like , and 2 ) substantive - - once you set up the organizations , what will they do .
organizational effort : wood stated that this effort has already begun with the july 12 orders and the northeast and southeast mediation efforts . the commission will be issuing additional orders in the northeast , southeast and midwest within the next couple of ferc meetings . wood also stated that it is time for rto west and desert star to " marry up , " meaning , i suppose , that the two should consolidate . wood does not think that california can be included in the western rto yet since it has lingering problems .
structural effort : the commission will initiate a section 206 proceeding to address market design and structure issues in order to translate the 8 functions established in order no . 2000 into rto structures . to achieve this goal , the commission is establishing an " rto week " of advanced workshops , from october 15 - 19 , in advance of issuing a nopr , to address structural issues such as : congestion management ; cost recovery ; market monitoring ; transmission planning ; reliability ; transmission rights . wood also envisions that the commission will develop a new pro forma tariff to replace the existing order no . 888 transmission tariff . the new tariff will apply to all public utilities and rtos .
wood also recognized that some " sticks " are needed to entice rto participation . therefore , wood proposes to have all public utilities come in by december 15 , 2001 with a declaration to join an rto . if they do not make this declaration , these entities will have their market based rate authority revoked on a prospective basis . furthermore , wood states that if entities do not join rtos , they should not be authorized to merge their facilities , and that ferc will also look at their rates to determine whether they are still just and reasonable rates compared with rates offered by rtos . wood states that these " sticks " provide incentive , but do not mandate , rto participation .
with regard to the pending requests for rehearing , wood asked legal staff to figure out how " ferc can get there . " in other words , i think wood is telling them to develop the legal analysis for denying rehearing .
while commissioner breathitt is skeptical about some of these rto proposals , because she was not required to vote on anything today , she only expressed her concern .
upcoming dates
october 15 - 19 - - rto workshops
end of october - - further orders on northeast , southeast , midwest rtos
december 15 , 2001 - - all public utilities must commit to an rto or have their market based rates revoked
proposed rule for standards of conduct
within the next few days , ferc will be issuing a notice of proposed rulemaking ( " nopr " ) on standards of conduct for transmission providers . as explained at the meeting ( we do not have a copy of the nopr yet ) , the nopr will propose to apply standards of conduct uniformly to electric transmission providers and gas pipeline transportation providers similarly . the nopr also proposes to broaden the definition of affiliate to include all energy affiliates , not just marketers . the standards of conduct would not apply to rtos and transmission providers who are members of an rto may ask for an exemption from the standards .
the nopr will also likely include a proposal that the standards apply to transmission - owners ' marketing affiliates that are serving native load customers . as you know , the present standards do not apply to the affiliates of tos that are only buying and selling power for native load customers . as the interim general counsel noted , these marketing affiliates can go into the control room and have unrestricted interaction with the to .
there was some discussion of whether it is necessary to apply the standards to affiliates serving native load . staff told the commissioners that market participants have been complaining for years about this loop hole in the rules . pat wood said they will include the proposal in the nopr ( breathitt may not support ) , but if the industry does not support the proposal , ferc will pull it . we of course will strongly support the proposal .
provision of adequate electrical capacity ( icap )
chairman wood asked staff to prepare a presentation on reserves and installed capacity requirements . wood noted that the commission had to issue an order on icap in new england during their recess in august , and he is not that familiar with the issues . therefore , he asked staff to prepare a presentation , which they made at the meeting this morning . the presentation will be made public within the next couple of days . in sum , staff seems to believe that some type of icap requirement is needed for reliability .
after the presentation , wood noted that the new england icap order has enough wiggle room to allow the commission to change its mind once the commissioners better understand the issue . wood sees that there is a potential conflict between decentralized , competitive markets and the need for sufficient supply ( without politically unacceptable , prolonged price spikes ) .
commissioner brownell ( from the pennsylvania puc ) has a better understanding of icap and expressed concerns that icap may be an outdated tool that acts as a barrier to entry without any definable benefit to customers .
realizing that there are many positions on this topic , chairman wood said he will publish the staff report and ask for comments by october 17 . we will definitely submit comments on this and will include everyone in the drafting process .
sorry this is so long , but a lot happened today . we will provide a summary of the market power discussion as soon as it is over . let us know if you have any questions .
sarah