- Email: [email protected]
FERC hits pools on acess
T
H
E
would only prohibit future contracts that exceed avoided cost. Midwest Power and the other three Iowa investor-owned electric utilities asked the Iowa legislature this year to enact legislation it said would make the Iowa law conform to federal law. The bill failed to receive final action.
Annals of Competition
Suffolk Co., Others, Try to Escape LILCO's High Costs dd Suffolk County, N.Y., to the ocal jursidictions that are trying to lower the cost of electricity to their businesses and residents. Suffolk County is preparing a request for proposals to supply its small municipal utility with power in a move to compete with Long Island Lighting Co., according to Washington attorney Christine Ryan. Should LILCO refuse to transmit competitive power to the count, Ryan said Suffolk might file a transmission access complaint at the Federal
Energy Regulatory Commission. "We are working on a plan for rate relief for Suffolk County," Ryan told The Electricity Journal. "We hope to have an RFP out within a couple of weeks. It certainly won't take much to beat LILCO's prices, so we expect to be able to come up with significant savings for the county." LILCO has among the highest electrical rates in the countr~ Suffolk County has a small public power agency that was formed
July 1995
N
E
W
S
I
N
F
in 1983 to take the county's small share of New York Power Authority hydro. The county electric agency also buys 5 MW of power from NYPA's FitzPatrick nuclear plant for distribution to some industrial customers. According to Ryan, the variable amounts of NYPA hydropower are sold to all customer classes through LILCO's distribution system under a billing credit arrangement with the utili~. Wouldn't Suffolk County's plans fit into the "sham muni"
O
C
U
S
said, "but that is available to us if we need it." LILCO is facing a number of competitive threats, in spite of CEO William Catacosinos's boast to security analysts last year that the company was effectivelyinsulated from competition by Long Island Sound. In addition to the county's initiatives, five Suffolk County municipalities-Southampton, East Hampton, Riverhead, Shelter Island and Southoldm are looking at municipalization. Also, a number of large industrial customers called
the Hauppage Industrial Association are looking at getting a break in electric rates, either through LILCO discounts or retail wheel-
ins. FERC Hits Pools on Access ~ C e Federal Energy Regulatory ommission continued to add provisions of the 1992 Energy Policy Act? Not at all, says Ryan, with the Washington firm of Brickfield, Burchette and Ritts. "One of the exceptions to the sham provisions," she says, "is if you were in operation as of the date of passage." Suffolk County's electric agency meets that criterion. Should LILCO refuse to transmit competing power to the count, the county would be in a position to file a complaint at FERC under Section 211 of the Federal Power Act. "We don't anticipate filing a 211 case," Ryan
flesh to its policies on open transmission access on May 16, ruling that the commission can order power pools to provide access to third parties. FERC told the Penn-
sylvania-New Jersey-Maryland Interconnection that its members must negotiate jointly with Duquesne Light Co. for transmission services for up to 300 MW of power the Pittsburgh-based utility wants to market to the east. But FERC rejected Duquesne's request that FERC order PJM to provide a single, system-wide rate, rather than a series of pancaked rates piled on by each of the PJM members. FERC said PJM must provide access to
11
T
H
E
Duquesne on the same terms that it offers PJM members, and if that means pancaked rates, so be it. Determining just what PJM charges its members for transmission service will be difficult, FERC acknowledged, noting that much of the service that goes on in the PJM pool is done on a reciprocal basis, not through the exchange of dollars. Ordering PJM to come up with a rate that is comparable and not discriminatory, FERC said, is not easy "Given the complexity and uniqueness of the PJM companies' current contractual arrangements which rely heavily on reciprocity in lieu of monetary charges, the commission is aware that it will be difficult to compare the treatment afforded other PJM companies to that offered Duquesne." So FERC ordered PJM essentially to bare all in providing the commission with details as to how it charges its members for service. RC also agreed with PJM t costs of the transmission system include all of the PJM transmission, not just transmission lines above 500 kV. Duquesne had argued that since all it wanted was 500 kV service, the rest of the PJM system ought not to count, but FERC concluded that the PJM system was fully integrated and it would be unjust to break out the 500 kV service separatel3a FERC's order directs some tough language at PJM's attempts to evade the open-access provisions of Section 211 of the Federal Power Act. The commission said PJM was "dilatory" in responding 12
N
E
W
S
I
N
F
to Duquesne's transmission request, attempting to stonewall the utility and "apparently impaired Duquesne's ability to compete effectively" in a Consolidated Edison Co. solicitation for power last year. The commission also noted that "none of the PJM companies has an open access transmission tariff offering firm transmission service at commission-approved rates, terms and conditions."
O
C
U
S
TNP Gives Up on ERCOT, Seeks Costs Cuts with Allies xpect to see much more of this, as competition widens and deepens: Another small investorowned utility is breaking ranks with its IOU brethren in the Electric Reliability Council of Texas in order to secure a more competitive power supply Recent actions by tiny Texas-New Mexico Power Co. (212,000 customers, $620 million revenues in 1993) signify the new alliances that will characterize the new electric power in-
dustry.
In a companion order, FERC ordered Allegheny Power System to negotiate with Duquesne over transmission access. Duquesne had been negotiating with neighboring APS, but the talks bogged down over pricing. APS had proposed to charge Duquesne the full costs of reproducing the APS transmission system in return for service. FERC noted that APS does not charge its three subsidiaries reproduction costs for transmission service and told the utility holding company to offer service on the same terms and conditions it offers service to itself. Both PJM and APS have 70 days to negotiate with Duquesne.
First, TNP, an investor-owned utili~, and Raybum Country Electric Cooperative, a distribution co-op, are jointly studying forming a joint power pool to obtain wholesale power options and unbundled transmission services. Raybum is also evaluating other ways to obtain control area services. Kevern Joyce, TNP president and CEO, said the move is designed to provide "an alternative to the repressive business practices being employed by ERCOT and some ERCOT utilities," notably TU Electric. Both TNP and Rayburn are wholesale customers of TU, the largest electric utility in Texas. TNP purchases 331 MW from TU, and from Raybum, 300 MW. According to Ralph Johnson, TNP vice president, both have attempted to negotiate with TU for less-restrictive transmission service. Joyce said his company needs transmission flexibility in order to
The Electricity Journal
H
E
would only prohibit future contracts that exceed avoided cost. Midwest Power and the other three Iowa investor-owned electric utilities asked the Iowa legislature this year to enact legislation it said would make the Iowa law conform to federal law. The bill failed to receive final action.
Annals of Competition
Suffolk Co., Others, Try to Escape LILCO's High Costs dd Suffolk County, N.Y., to the ocal jursidictions that are trying to lower the cost of electricity to their businesses and residents. Suffolk County is preparing a request for proposals to supply its small municipal utility with power in a move to compete with Long Island Lighting Co., according to Washington attorney Christine Ryan. Should LILCO refuse to transmit competitive power to the count, Ryan said Suffolk might file a transmission access complaint at the Federal
Energy Regulatory Commission. "We are working on a plan for rate relief for Suffolk County," Ryan told The Electricity Journal. "We hope to have an RFP out within a couple of weeks. It certainly won't take much to beat LILCO's prices, so we expect to be able to come up with significant savings for the county." LILCO has among the highest electrical rates in the countr~ Suffolk County has a small public power agency that was formed
July 1995
N
E
W
S
I
N
F
in 1983 to take the county's small share of New York Power Authority hydro. The county electric agency also buys 5 MW of power from NYPA's FitzPatrick nuclear plant for distribution to some industrial customers. According to Ryan, the variable amounts of NYPA hydropower are sold to all customer classes through LILCO's distribution system under a billing credit arrangement with the utili~. Wouldn't Suffolk County's plans fit into the "sham muni"
O
C
U
S
said, "but that is available to us if we need it." LILCO is facing a number of competitive threats, in spite of CEO William Catacosinos's boast to security analysts last year that the company was effectivelyinsulated from competition by Long Island Sound. In addition to the county's initiatives, five Suffolk County municipalities-Southampton, East Hampton, Riverhead, Shelter Island and Southoldm are looking at municipalization. Also, a number of large industrial customers called
the Hauppage Industrial Association are looking at getting a break in electric rates, either through LILCO discounts or retail wheel-
ins. FERC Hits Pools on Access ~ C e Federal Energy Regulatory ommission continued to add provisions of the 1992 Energy Policy Act? Not at all, says Ryan, with the Washington firm of Brickfield, Burchette and Ritts. "One of the exceptions to the sham provisions," she says, "is if you were in operation as of the date of passage." Suffolk County's electric agency meets that criterion. Should LILCO refuse to transmit competing power to the count, the county would be in a position to file a complaint at FERC under Section 211 of the Federal Power Act. "We don't anticipate filing a 211 case," Ryan
flesh to its policies on open transmission access on May 16, ruling that the commission can order power pools to provide access to third parties. FERC told the Penn-
sylvania-New Jersey-Maryland Interconnection that its members must negotiate jointly with Duquesne Light Co. for transmission services for up to 300 MW of power the Pittsburgh-based utility wants to market to the east. But FERC rejected Duquesne's request that FERC order PJM to provide a single, system-wide rate, rather than a series of pancaked rates piled on by each of the PJM members. FERC said PJM must provide access to
11
T
H
E
Duquesne on the same terms that it offers PJM members, and if that means pancaked rates, so be it. Determining just what PJM charges its members for transmission service will be difficult, FERC acknowledged, noting that much of the service that goes on in the PJM pool is done on a reciprocal basis, not through the exchange of dollars. Ordering PJM to come up with a rate that is comparable and not discriminatory, FERC said, is not easy "Given the complexity and uniqueness of the PJM companies' current contractual arrangements which rely heavily on reciprocity in lieu of monetary charges, the commission is aware that it will be difficult to compare the treatment afforded other PJM companies to that offered Duquesne." So FERC ordered PJM essentially to bare all in providing the commission with details as to how it charges its members for service. RC also agreed with PJM t costs of the transmission system include all of the PJM transmission, not just transmission lines above 500 kV. Duquesne had argued that since all it wanted was 500 kV service, the rest of the PJM system ought not to count, but FERC concluded that the PJM system was fully integrated and it would be unjust to break out the 500 kV service separatel3a FERC's order directs some tough language at PJM's attempts to evade the open-access provisions of Section 211 of the Federal Power Act. The commission said PJM was "dilatory" in responding 12
N
E
W
S
I
N
F
to Duquesne's transmission request, attempting to stonewall the utility and "apparently impaired Duquesne's ability to compete effectively" in a Consolidated Edison Co. solicitation for power last year. The commission also noted that "none of the PJM companies has an open access transmission tariff offering firm transmission service at commission-approved rates, terms and conditions."
O
C
U
S
TNP Gives Up on ERCOT, Seeks Costs Cuts with Allies xpect to see much more of this, as competition widens and deepens: Another small investorowned utility is breaking ranks with its IOU brethren in the Electric Reliability Council of Texas in order to secure a more competitive power supply Recent actions by tiny Texas-New Mexico Power Co. (212,000 customers, $620 million revenues in 1993) signify the new alliances that will characterize the new electric power in-
dustry.
In a companion order, FERC ordered Allegheny Power System to negotiate with Duquesne over transmission access. Duquesne had been negotiating with neighboring APS, but the talks bogged down over pricing. APS had proposed to charge Duquesne the full costs of reproducing the APS transmission system in return for service. FERC noted that APS does not charge its three subsidiaries reproduction costs for transmission service and told the utility holding company to offer service on the same terms and conditions it offers service to itself. Both PJM and APS have 70 days to negotiate with Duquesne.
First, TNP, an investor-owned utili~, and Raybum Country Electric Cooperative, a distribution co-op, are jointly studying forming a joint power pool to obtain wholesale power options and unbundled transmission services. Raybum is also evaluating other ways to obtain control area services. Kevern Joyce, TNP president and CEO, said the move is designed to provide "an alternative to the repressive business practices being employed by ERCOT and some ERCOT utilities," notably TU Electric. Both TNP and Rayburn are wholesale customers of TU, the largest electric utility in Texas. TNP purchases 331 MW from TU, and from Raybum, 300 MW. According to Ralph Johnson, TNP vice president, both have attempted to negotiate with TU for less-restrictive transmission service. Joyce said his company needs transmission flexibility in order to
The Electricity Journal