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 For Immediate Release
Contact: Bob Bonitati , LPPC | (703) 740-1754
September 20, 2006
Press
Advisory
Today, the Large Public Power Council (LPPC)
filed comments with the Federal Energy Regulatory Commission (FERC) that
were sharply critical of several industry advocates urging FERC to
"revisit" mandatory RTO participation and the Standard Market Design (SMD)
proposals abandoned by the Federal Energy Regulatory Commission last
year.
The strongly worded comments were filed in response to FERC's "Notice of
Proposed Rulemaking" that revised Order No. 888, providing "open access
transmission."
The LPPC comments concluded that the FERC proposal "struck a
well-considered balance" between those in the industry arguing for
mandatory structures and those concerned that substantial change to
Order 888 would be "a costly and unnecessary exercise."
The LPPC took issue with comments from Calpine, PJM, the California
Public Utilities Commission (CPUC) and consultants William Hogan and
John Chandley.
LPPC also responded to comments from the Edison Electric Institute (EEI.)
Attached is a summary statement of the filing which is available for
attribution to the LPPC. Jonathan Schneider, LPPC's regulatory counsel
is available for questions and comments at 202 728 3034 or by cell at
301 646 7188.
A copy of the LPPC filing is electronically available by contacting Sean
Elkin at selkin@smithharroff.com or at 703 740 1757.
The LPPC's membership includes 24 of the nation's largest publicly
owned, not-for-profit energy systems. Members are located in 11 states
and provide power to some of the largest cities in the country including
Los Angeles, Seattle, Omaha, Phoenix, Memphis, Orlando and Austin.
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Statement of the Large Public Power Council on Reply Comments in FERC
Docket No. RM05-25
The Large Public
Power Council (LPPC) filed comments today in FERC Docket No. RM05-25
that are sharply critical of industry participants, including PJM
Interconnection, who are asking the Federal Energy Regulatory Commission
(FERC) to revisit mandatory RTO participation and the Standard Market
Design (SMD) framework abandoned by the Commission last year.
Under Chairman
Kelliher's leadership, the Commission finally put to rest the debate
over market restructuring that bedeviled the industry for years. The key
to the Chairman's success has been his respect for conclusions drawn in
different parts of the nation on how best to serve electric customers.
PJM, a number of independent power producers and their consultants have
asked the Commission to jeopardize that success by embroiling the
industry in the same debate over mandatory structures from which it only
recently emerged.
Without a clear
case for one industry structure or another, it would be a terrible
misstep for the Commission to impose an RTO structure, and certainly the
Locational-Based Marginal Cost (LMP) open dispatch model, on regions
that do not see the cost-justification. This would put the Commission in
the position it was in three years ago. And yet, this is exactly what
PJM and supporting consultants Professor William Hogan and John Chandley
recommend.
The LPPC comments
also take aim at Professor Hogan's recommendation for the Commission to
implement a mandatory generation dispatch protocol that would use
utility-owned generation resources in order to accomplish third-party
transmission transactions.
While Professor
Hogan's testimony lacks any real supporting detail, it seems clear that
his aim is to recoup what he thinks was lost with the Commission's
abandonment of the SMD proposal. Not only is that recommendation far
beyond the scope of the proceeding, it asks the Commission to commandeer
generation over which it has no jurisdiction.
LPPC's comments
also take issue with Calpine, and the California Public Utilities
Commission (CPUC) and certain other parties arguing that the Commission
should treat non-public utilities identically to fully jurisdictional
companies under Order No. 888.
The new Section 211A of the Federal Power Act authorizes the Commission
to compel non-public utilities to provide transmission service when such
an order is justified, but it does not compel the Commission to act. The
CPUC, for example, is dead wrong in claiming that the intent of Congress
is to subject non-public to regulation identical to fully-jurisdictional
utilities. The Commission is given the discretion to act within the
limitations of the statute. When it chooses to act, it can only be on
the basis of substantial evidence of discrimination. But, there is no
historical pattern of discrimination by non-public utilities that would
justify generic action.
Nearly all non-public utilities offer open access transmission service,
and LPPC members representing nearly 90% of the non-federal municipal
transmission in the nation have stepped up to implement the
"Comparability Guidelines" laid out in LPPC's comments. Under these
guidelines, all subscribing non-public utilities would provide open
access service under publicly available tariffs largely reflecting the
Order No. 888 services. That offer more than satisfies the new statute.
LPPC also attacked "as particularly egregious" the claim made by Calpine
that non-public utility operations under a Commission-approved tariff
are necessary in order to protect grid reliability. It is outrageous for
Calpine to claim that non-public operations outside a
Commission-approved OATT raise a reliability issue.
The municipal community very well understands that the new mandatory
reliability regime applies equally to public and non-public utilities.
The new NERC standards at no point suggest that operation under a
Commission-approved OATT is a relevant matter. Calpine's statements to
the contrary are a scare-tactic designed to divert attention from the
real issues.
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