Calif. restructure plan filed at FERC, opponents arm

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litical dispute over retail v. whole-

power generation have been di-

urging FERC to reject the Western

sale wheeling and its attendant di-

rected by the electric utility indus-

Power Exchange’s (WEPEX) post-

visive debates. Stone & Webster defines distrib-

try”

uted generation as “any small

age stamp transmission access fee in favor of a fee that dis~~ishes

Foes Hit Process, Result

between local and regional func-

scale modular generation technology that is situated within a utility’s service area and is usually interconnected to the obsession or distribution system.” The technologies available for distributed generation include conventional internal combustion engine-generator sets, combustion turbines and combined cycle units, photo-

tiOnS.

Cal$ Resfructure Plan Filed at ERC, O~o~e~~s Arm

Equity and comparability demand that regional transmission facilities be priced ‘separate and distinct from local transmission fa-

n late April California’s three in-

I

cilities,” said coalition spokesman

filed their proposal for a state-

bers include Southern California

vestor-owned electric utilities

George Minter. Coalition mem-

wide power pool with the Federal Energy Regulatory Commission.

Gas, Los Angeles Dept. of Water and Power, Watson Cogeneration, Sithe Energies, AES Corp.,

voltaics, wind, and fuel cells, per-

Pacific Energy, Sacramento Mu-

haps the most promising of all.

E

ach of these technologies can

nicipal Utility District, Pasadena

find a niche. The engine-gen-

Water and Power Dept. and FPB Cogeneration.

erator has “established a reputa-

T

tion for reliability in standby emergency applications and in re-

he WEPEX filing outlines the function and protocols of the

mote locations,” notes the study

power exchange and the ISO. Pro-

PVs and turbines work where ge-

ponents say they hope to win

ography is right and incentives

quick review from FERC so that

are available to offset their high

they can have in place a system

cost. The fuel cell currently in

that offers the benefits of competi-

greatest use, the phosphoric acid

tion to every class of customer, in-

machine, would be used “mostly

But the proposal, which includes

cluding individual residential cus-

in commercial settings” and will

a Power Exchange and an inde-

tomers, by fan. 1,1998.

be “important in applications

pendent system operator to run

where cleanliness

‘With this filing,” said SCE’s

the state’s transmission grid as an

Vikram Budhraja, “we begin put-

mium.” But the best competitor

integrated system, drew immedi-

ting into place the nuts and bolts

so far is the small gas turbine,

ate opposition from a group of

of a new, fully competitive elec-

which is “relatively low cost and

municipal electric utilities, non-

tricity market that will benefit all

improving in efficiency and envi-

utility generators, and a major gas

California consumers. It is a prece-

ronmental attributes.”

distributor. Opponents have

dent-setting filing.”

is at a pre-

But for the gas industry to cap-

formed a coalition to fight the fil-

Both the exchange and the IS0

ture the market for distributed

ing on the basis that it improperly

would be governed by inde-

generation, it needs to mount a se-

lumps local with regional trans-

pendent boards created so that no

rious action plan, says the NCAA

mission facilities, and will there-

one interest, or combination of

Foundation report. “Someone has

fore result in higher transmission

two interests, could determine

got to make this happen,” says

charges than necessary. The

policy decisions. The boards

Ramsey “Thus far,” says the re-

group, known as the Coalition

would include IOUs and mums,

port, “discussions of distributed

for Comparable Transmission,

Jzm?2996

is

non-utility generators, marketers,

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end users, and public interest rep-

important municipal utilities,

and, because of the April 29 dead-

resentatives. The existing owners

over whom neither the CPUC nor

line, were trying to create some-

of grid facilities would continue

FERC has jurisdiction.

their ownership, but would cede

thing the three [investor-owned

While there was obfuscation

operational control to the ISO.

over the mums’ absence-IOU

utilities] could agree on, not someof-

thing we all could support,” Jor-

Generators would bid their gen-

ficials acknowledged that the mu-

eration into the power pool,

nis were not party to the final fil-

where it would be dispatched on

ing, but did not explain why the

group for the state’s municipal

the basis of lowest cost first.

munis were not on board-propo-

utilities, claims that WEPEX’s in-

dan said. CMUA, the statewide trade

nents failed to disclose that fully a

dependent system operator pro-

three components: an access

month before, in a March 28 letter

posal is biased toward investor-

charge, a usage charge, and a

to the three IOUs, the municipal

owned utilities. Also leaving the

charge for line losses. They would

utilities participating in WEPEX

WEPEX talks were representatives

also feature zonal transmission

said they were dropping out and

Transmission prices would have

from several California municipal

pricing, with relatively homogene-

joint action agencies and munici-

ous prices within each zone. How-

pal systems.

ever, with congestion likely be-

L6

A

lthough we did not believe

voting status was neces-

tween zones, interzonal prices would be adjusted to cover the

sary, we did anticipate that the

costs necessary to reduce conges-

WEPEX advisory group would operate in a collaborative man-

tion.

T

he proposal also includes a

ner,” said CMUA’s letter. “While

hedging mechanism to pro-

we understand the time con-

tect against the costs of relieving

straints you feel, we are nonethe-

congestion, called a transmission

less concerned that the new proc-

congestion contract. Parties could

ess can only result in an Investor

pay a fixed price for a hedging

Owned Utility System Operator

contract in exchange for avoiding

(IOUSO) and not an Independent

the need to pay future congestion

System Operator designed to

charges.

meet the needs of all California, said “it would be inappropriate

let alone the needs of the rest of

ence where the WEPEX plan was

for anyone to characterize CMUA

the region. An IOUSO designed

rolled out included Pacific Gas

and its members as being ‘in-

only to meet the CPUC deadline

and Electric, Southern California

volved’ in the process of prepar-

would be more like a merger of

Edison, and San Diego Gas &

ing the filing.”

IOU transmission systems than

The Washington press confer-

Electric. The utilities were joined

According to Gerald Jordan of

the creation of an independent

by President Dan Fessler of the

the California Municipal Utili-

California Public Utilities Com-

ties Association, the self-imposed

system.” CMUA urged the IOU steering

mission, a representative of Gov.

need to file the WEPEX proposal

committee of WEPEX, following

Pete Wilson, a Democratic state

at FERC by April 29 (Elec. Daily,

the filing, “to institute a collabora-

senator, and a host of consumer

Apr. 30)-a

tive process aimed at establishing,

and small business groups. But at

CPUC-produced

the roll-out there was one obvious

ess that forced municipal utilities

with proper incentives for all

empty seat at the crowded table:

to drop out of negotiations. “They

transmission owners and users to

California’s large and strategically

changed the process in March

join.”

20

deadline set by the a skewed proc-

at a minimum, a California IS0

The Electricity Journal