Message-ID: <15776298.1075852494437.JavaMail.evans@thyme> Date: Mon, 29 Oct 2001 05:44:53 -0800 (PST) From: jeff.brown@enron.com To: d..steffes@enron.com Subject: Reuters:FERC gives states role in RTO formation Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Brown, Jeff X-To: Steffes, James D. X-cc: X-bcc: X-Folder: \JSTEFFE (Non-Privileged)\Steffes, James D.\Deleted Items X-Origin: Steffes-J X-FileName: JSTEFFE (Non-Privileged).pst Jim - Is this purely political or is the FERC giving the states "real" authority? Thanks - Jeff ---------------------- Forwarded by Jeff A Brown/HOU/EES on 10/29/2001 07:43 AM --------------------------- "Dick S George" on 10/28/2001 09:19:07 PM To: "DS George" cc: Subject: Reuters:FERC gives states role in RTO formation CC list suppressed... The battle to determine which form reduces cost and who's study we are to believe the Marketer's or the State's rages on...dsg FERC to give states a role in RTO formation By Chris Baltimore (Reuters) WASHINGTON, Oct 24 (Reuters) U.S. federal energy regulators on Wednesday pledged to create a new body to cooperate with state officials on the planning of regional transmission grid combinations after complaints that they were left out of the process. The Federal Energy Regulatory Commission, which oversees the country's power grid operators, has ordered utilities in the Southeast, Northeast, Midwest and West to combine their assets into a handful of regional transmission organizations (RTOs) by the end of the year. The agency has pushed hard to create the RTOs to avoid a repeat of the power crisis in California last winter, in which the antiquated U.S. grid prevented more power from flowing into the state. FERC commissioners acknowledged on Wednesday that some changes were needed to address criticism from state utilities regulators that they were left out of the RTO rule-making process. STATES GET SEAT AT THE TABLE FERC Commissioner Nora Mead Brownell, a former Pennsylvania regulatory official, proposed creating a regional council that would share authority between FERC and states on setting RTO policies. Citing states' confusion about FERC's direction and inconsistent internal agency communication, Brownell, in a memo to commissioners, said the council "can provide the necessary flexibility that we will likely need moving forward to RTO formation." The request was made by David Svanda, commissioner of the Michigan Public Service Commission, on behalf of six other Midwest states at FERC's workshop on RTOs last week. The move is "a ceding of jurisdiction ... to state regulators for us to co-govern the process with them," FERC Chairman Pat Wood told reporters after the meeting. Wood previously headed Texas' state utility regulatory agency. Of state commissions, Wood said "they need to be invited with a nice seat at the table, not just standing at the door taking tickets." COST-BENEFIT ANALYSIS PROMISED FERC also promised to prepare a formal cost-benefit analysis of RTOs for states and consumers, after some states raised concerns that the costs did not justify the benefits. The agency did not say when the study would be completed. On Tuesday, the New York Independent System Operator (ISO) released its own cost-benefit study, which asserted the creation of a large Northeastern RTO could boost consumer power bills by some $90 million a year. The non-profit New York ISO would also be put out of business by a regional for-profit RTO. However, a separate study issued last month by energy firm Mirant Corp , a supporter of RTOs, concluded that a Northeastern RTO would save consumers $440 million annually. At the meeting, FERC commissioners heard staff presentations on RTO development progress in the Southeast, Northeast and Midwest. But few new details emerged on the ultimate direction FERC will take in guiding utilities. Wood said that more specifics would be available at the next meeting on Nov. 7, just a month ahead of FERC's Dec. 15 deadline for RTO membership. Under FERC's plan, the RTOs would be for-profit groups in the U.S. Northeast, Midwest, Southeast and West. Each region would combine public utility transmission facilities to provide open access, more reliable power and lower rates for consumers.