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Subject: Fwd: DJ FERC Affirms It Lacks Jurisdiction In Pwr Facility Sales

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Subject: DJ FERC Affirms It Lacks Jurisdiction In Pwr Facility Sales
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FYI

DJ FERC Affirms It Lacks Jurisdiction In Pwr Facility Sales
Copyright , 2001 Dow Jones & Company, Inc.

WASHINGTON (Dow Jones)--The U.S. Federal Energy Regulatory Commission 
Wednesday reaffirmed its policy finding that it lacks jurisdiction over 
generation facility transfers.

     The Federal Power Act requires the commission to approve jurisdictional 
asset transfers greater than $50,000 in value. But FERC doesn't view 
generation assets as jurisdictional.

     FERC often rules on generation asset transfers, but only in the context 
of associated transmission assets and power sales connected with the 
generation assets. FERC regulates electricity sales, but not the plants that 
produce the power.

     With divestiture of generation assets becoming increasingly common in 
the $215 billion U.S. electricity sector, this policy has increasingly been 
questioned by consumer interests and others.

     Most recently, the American Public Power Association and Citizen Power 
Inc., a utility watchdog group, petitioned the commission to reconsider its 
view that generation asset transfers, absent associated transmission 
facilities and power sales agreements, don't fall under FERC jurisdiction.

     At issue were generation asset sales by Duquesne Light Co. (DQZ), and 
FirstEnergy Corp.'s (FE) transfer of power plant ownership from its utility 
operating units to FirstEnergy's competitive services unit.

     The commission was unpersuaded by arguments of APPA and Citizens Power 
that state regulation is inadequate to protect the public interest and 
promote competition in the restructuring electric utility industry.

     "There is no necessary nexus between the interstate transmission or sale 
of electric energy, on the one hand, (the triggering events giving rise to 
our jurisdiction) and the disposition of a generation facility by itself," 
FERC said.

     "Not only does the statutory text support our interpretation, but there 
is no precedent, legislative history, or case law which would support a 
contrary conclusion," FERC said, denying the petition.

     FERC cited section 203(a) of the Federal Power Act as conferring 
authority to regulate the disposition of "facilities subject to the 
jurisdiction of the commission." FERC has never asserted jurisdiction over 
generation assets, and has traditionally left that to state utility 
regulators.

     By Bryan Lee, Dow Jones Newswires, 202-862-6647, 
mailto:[email-masked]
     (END) Dow Jones Newswires 07-02-01