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<title>Beyond RTOs: The Evolution of Regional Electricity-Related Institutions</title>
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<p class="MsoBodyText"><span style="font-style: normal; font-weight: 700">
<font size="6">BEYOND RTOS: THE EVOLUTION OF REGIONAL ELECTRICITY-RELATED
INSTITUTIONS</font></span></p>
<p ALIGN="left"><font face="Arial"><b><strong><font size="2"><br>
By <a href="#meyer">David H. Meyer</a><br>
</font></strong></b></font><font size="2">(<em>originally published by PMA OnLine Magazine: 02/04</em>)</font></p>
<p> </p>
<p class="MsoNormal" align="center"><b><i>One of the most important and
fundamental trends now at work in <br>
the U.S. electricity sector is the development of fully functional
regional <br>
markets and the probable evolution of a variety of regional <br>
institutions � not only RTOs � that will relate to them.</i></b></p>
<p class="MsoBodyText" align="left" style="text-align: left">RTOs as
Critical Building Blocks.<span style="font-weight: normal; font-style: normal">
It is generally recognized that wholesale power markets have become
regional (i.e., multistate) in scope. However, the Federal Energy
Regulatory Commission (FERC) is still scrambling to bring order and
economic efficiency into these markets by fostering the development of
regional transmission organizations (RTOs), entities that will have
day-to-day administrative responsibilities for developing and operating
these markets under FERC�s regulatory oversight. As specified in FERC�s
Order No. 2000 (issued December 20, 1999), an RTO is to have eight basic
functions: </span></p>
<p class="MsoBodyText" style="text-align: justify; text-indent: -.25in; margin-left: .25in">
<span style="font-weight: normal; font-style: normal">1)<span style="font-style: normal; font-variant: normal; font-weight: normal"> </span>Administer
a regional transmission tariff;</span></p>
<p class="MsoBodyText" style="text-align: justify; text-indent: -.25in; margin-left: .25in">
<span style="font-weight: normal; font-style: normal">2)<span style="font-style: normal; font-variant: normal; font-weight: normal"> </span>Manage
transmission congestion;</span></p>
<p class="MsoBodyText" align="left" style="text-align: left; text-indent: -.25in; margin-left: .25in">
<span style="font-weight: normal; font-style: normal">3)<span style="font-style: normal; font-variant: normal; font-weight: normal"> </span>Manage
parallel path flow issues;</span></p>
<p class="MsoBodyText" align="left" style="text-align: left; text-indent: -.25in; margin-left: .25in">
<span style="font-weight: normal; font-style: normal">4)<span style="font-style: normal; font-variant: normal; font-weight: normal"> </span>Be
a provider of last resort for the ancillary services needed to maintain
reliability in bulk power systems;</span></p>
<p class="MsoBodyText" align="left" style="text-align: left; text-indent: -.25in; margin-left: .25in">
<span style="font-weight: normal; font-style: normal">5)<span style="font-style: normal; font-variant: normal; font-weight: normal"> </span>Operate
a single regional OASIS website and independently calculate and present
total transmission capacity (TTC) and available transmission capacity (ATC);
</span></p>
<p class="MsoBodyText" align="left" style="text-align: left; text-indent: -.25in; margin-left: .25in">
<span style="font-weight: normal; font-style: normal">6)<span style="font-style: normal; font-variant: normal; font-weight: normal"> </span>Monitor
markets for design flaws and the exercise of market power; </span></p>
<p class="MsoBodyText" align="left" style="text-align: left; text-indent: -.25in; margin-left: .25in">
<span style="font-weight: normal; font-style: normal">7)<span style="font-style: normal; font-variant: normal; font-weight: normal"> </span>Plan
and coordinate transmission additions and upgrades; and</span></p>
<p class="MsoBodyText" align="left" style="text-align: left; text-indent: -.25in; margin-left: .25in">
<span style="font-weight: normal; font-style: normal">8)<span style="font-style: normal; font-variant: normal; font-weight: normal">
</span>Work with extra-regional parties to ensure interregional
coordination of wholesale power markets.</span><a href="#_edn1" name="_ednref1" title><span class="MsoEndnoteReference"><![if !supportFootnotes]><span style="font-weight: normal; font-style: normal; font-size: 12.0pt">[i</span><span style="font-family: Times New Roman; font-weight: normal; font-style: normal; font-size: 12.0pt">]</span><![endif]></span></a></p>
<p class="MsoBodyText" align="left" style="text-align: left">
<span style="font-weight: normal; font-style: normal">Now the FERC is hard
at work developing a Notice of Proposed Rulemaking to go beyond Order No.
2000 and provide guidance on a Standard Market Design (SMD) for the
markets that RTOs are to administer. The proposed rule, which FERC hopes
to publish this summer, will no doubt address a wide range of issues. In
recent statements, however, FERC has made clear its awareness of the need
to cultivate �demand response� capabilities in regional markets to dampen
spikes in wholesale electricity prices at times when electricity supplies
are extremely short. Although the �demand side� of electricity markets is
comparatively new territory for FERC, one should expect that in effect,
the new proposed rule will assign a ninth basic function to RTOs:
ensuring an adequate, market-based scaling back of demand at times when
supplies are short and wholesale prices are high. </span></p>
<p class="MsoBodyText" align="left" style="text-align: left">
<span style="font-weight: 700">Question:</span><span style="font-weight: normal; font-style: normal">
Will the FERC succeed in establishing an RTO-based market design as the
standard for the nation? </span><span style="font-weight: normal">Answer:</span><span style="font-weight: normal; font-style: normal">
Probably. In recent weeks the FERC appears to have settled on a basic
formula for regional wholesale markets based on �bid-based,
security-constrained dispatch, with locational marginal pricing (LMP).�
Although this concept has yet to gain strong support in the southeastern
U.S. and much of the west, it has won broad acceptance in the midwest, the
mid- Atlantic states, and the northeast. It is plausible to assert that
the design favored by FERC is proven and will soon be used for more than
half of the electricity generated and consumed in the United States. How
rapidly it may be adopted and deployed in the remainder of the country is
hard to say, but as of now, FERC�s vision appears to be gaining ground.
</span></p>
<p class="MsoBodyText" align="left" style="text-align: left"><!--[if gte vml 1]><v:shapetype id="_x0000_t202"
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<v:textbox>
<p class="MsoNormal"><b><i><span style="mso-bidi-font-size: 12.0pt">Looking for
a succinct statement of what �LMP� really means?</span></i></b><span style="mso-bidi-font-size: 12.0pt"><span style="mso-spacerun:yes">
</span>Consider this, from ISO-New England:<span style="mso-spacerun:yes">
</span>A �locational marginal price� is the �cost to serve the next MW of load
at a specific location, using the lowest production cost of all available
generation, while observing all transmission limits.�<span style="mso-spacerun:yes">
</span>In short, this is a single wholesale price for electric energy, from the
grid at a given location at a given time, taking into account both generation
costs and transmission constraints. </span>
<o:p></o:p>
</p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt">
<o:p> </o:p></span></p>
<p class="MsoNormal"><span style="mso-bidi-font-size: 12.0pt">Source:<span style="mso-spacerun:yes">
</span>iso-ne.com, March 2002.<span style="mso-spacerun:yes"> </span>(Note:<span style="mso-spacerun:yes">
</span>The viewgraph from which this quotation was taken is no longer on the
website.)</span><o:p></o:p></p>
</v:textbox>
</v:shape><![endif]--><![if !vml]><span style='mso-ignore:vglayout;position:
absolute;z-index:1;left:248px;top:1392px;width:582px;height:162px'><img
width=582 height=162 src="beyondrtos_files/image001.gif"
alt="Text Box: Looking for a succinct statement of what �LMP� really means? Consider this, from ISO-New England: A �locational marginal price� is the �cost to serve the next MW of load at a specific location, using the lowest production cost of all available generation, while observing all transmission limits.� In short, this is a single wholesale price for electric energy, from the grid at a given location at a given time, taking into account both generation costs and transmission constraints. Source: iso-ne.com, March 2002. (Note: The viewgraph from which this quotation was taken is no longer on the website.) "
v:shapes="_x0000_s1025"></span><![endif]></p>
<![if !mso]><![endif]>
<p> </p>
<p><span style="font-weight: normal; font-style: normal"> </span></p>
<p> </p>
<p class="MsoBodyText" align="left" style="text-align: left">
<span style="font-weight: normal; font-style: normal"> </span></p>
<p><br clear="ALL">
</p>
<p class="MsoBodyText" style="text-align: justify">
<span style="font-weight: 700">Conclusion:</span><span style="font-weight: normal; font-style: normal">
It is likely that RTOs will be established eventually in most of the
United States, and that they will be </span>
<span style="font-weight: normal">very</span><span style="font-weight: normal; font-style: normal">
strong and important institutions. Further, the rise of a strong RTO
will, over time, tend to induce the development of a variety of regional
counterpart organizations, public and private, that will have more or less
the same footprint as the RTO. </span></p>
<p class="MsoBodyText" style="text-align: justify">The Need for
State-Based Regional Counterparts to RTOs.
<span style="font-weight: normal; font-style: normal">Assuming RTOs are
formed, there will be a need for regional state-based organizations, with
footprints more or less coincident with those of the RTOs. The RTOs will
be subject to FERC oversight, but there will be many
regionally-significant electricity matters � of interest to FERC and the
RTOs � that will lie outside FERC jurisdiction, and hence outside RTOs�
official responsibilities as well. The states will find it useful to
create regional organizations through which they will be able to address
electricity matters of common interest, and achieve an appropriate balance
between regional and state (or even local) concerns. An existing example
of such a regional organization is the western states� Committee for
Regional Electric Power Cooperation, or CREPC. In general, FERC and the
RTOs will prefer to deal with regionally consistent positions, and they
are likely to be generally supportive of regional state-based
organizations.</span><a href="#_edn2" name="_ednref2" title><span class="MsoEndnoteReference"><![if !supportFootnotes]><span style="font-weight: normal; font-style: normal; font-size: 12.0pt">[ii</span><span style="font-family:"Times New Roman";font-weight:normal;font-style:normal"><span style="font-weight: normal; font-style: normal; font-size: 12.0pt">]</span><![endif]></span></span></a><span style="font-family: Times New Roman; font-weight: normal; font-style: normal">
</span></p>
<p class="MsoBodyText" align="left" style="text-align: left">
<span style="font-weight: normal; font-style: normal">For the near term,
these organizations are likely to have relatively modest objectives � that
is, they are most likely to be used as vehicles for facilitating
cooperation among the member states. Eventually, stronger organizations
with more specific functions and powers may be formed as regional
compacts. However, such compacts would require specific federal
legislative charters, and if the charters are to gain the necessary
political support, they must fit perceived regional needs with glove-like
precision. For the near term, if the disposition for cooperation among
states is strong, there is much to be done, as the discussion below will
show. </span> </p>
<p class="MsoBodyText" align="left" style="text-align: left">Regional
Coordination of Long-Term Generation Adequacy<span style="font-weight: normal; font-style: normal">.
At FERC�s conferences with stakeholder groups concerning the Single Market
Design rulemaking, there has been broad support for some programmatic
arrangements to ensure the adequacy of regional generation resources, even
though as yet there is little agreement as to how this should be done
administratively, or by whom. </span></p>
<p class="MsoBodyText2"><span style="font-size:12.0pt">Despite these
uncertainties, there is little doubt that a generation capacity shortage
in a multistate wholesale power market leads to acute regional problems,
particularly reduced reliability and the potential for dramatic increases
in wholesale power prices. Individual states might be able to insulate
themselves to some extent through state-level capacity requirements, but
they would still remain vulnerable to spillover effects if neighboring
states did not take sufficiently effective measures. Further, there is an
appreciable risk of free-rider effects here; that is, states (and the load
serving entities under their jurisdiction) that take protective action by
adopting and implementing capacity requirements might shoulder significant
costs without being able to prevent a broader regional sharing of the
benefits in the event of a regional shortage.</span> </p>
<p class="MsoNormal">In a staff options paper on issues related to the SMD,
FERC has called for comments on several possible approaches to ensuring
generation adequacy.<a href="#_edn3" name="_ednref3" title><span class="MsoEndnoteReference"><![if !supportFootnotes]><span style="font-size: 12.0pt">[iii</span><span style="font-size: 12.0pt">]</span><![endif]></span></a>
The options vary in terms of the extent to which they would involve the
state commissions or lead to formal regional requirements. Regardless of
how this issue plays out, however, the pressures to ensure <i>regional</i>
generation adequacy in some fashion will not go away, and the states will
need to seek regional consistency in how this is to be accomplished.
</p>
<p class="MsoBodyText2"><span style="font-size:12.0pt">Further, if
regional capacity requirements of some kind are created, some parties will
probably advocate using them as mechanisms to support less conventional
resources, such as renewable generating capacity, distributed generation,
and price-responsive load. This will provide additional agenda material
for regional negotiations among states. </span></p>
<p class="MsoBodyText" align="left" style="text-align: left">Harmonizing
State Demand Response Programs across Regional Areas.
<span style="font-weight: normal; font-style: normal">As mentioned above,
FERC � with strong state support � wishes to support the evolution of a
market-based demand response capability in wholesale markets. To help
facilitate this evolution, FERC and the U.S. Department of Energy
co-sponsored a public conference on demand response in Washington, DC on
February 14, 2002. A recurrent theme at the meeting was the need to
achieve greater intra-regional consistency among states in the design of
demand response programs. Many of the large commercial and industrial
electricity consumers that FERC and the states hope to attract to such
programs operate in many or at least several states, and participation for
such consumers will be easier and more productive if the programs are
essentially the same across an RTO region. </span></p>
<p class="MsoBodyText" align="left" style="text-align: left">
<span style="font-weight: normal; font-style: normal">Want more evidence
of the need for regional vehicles for electricity cooperation among
states? Consider�</span></p>
<p class="MsoBodyText" align="left" style="text-align: left">Regional
Transmission-Related Planning and Siting Issues.
<span style="font-weight: normal; font-style: normal">A cluster of knotty,
regional-scale electricity planning issues is emerging that will demand
the attention and cooperation of state and federal officials, as well as a
host of other affected public and private parties. Although RTOs are to
have important regional transmission</span>
<span style="font-weight: normal; font-style: normal">planning</span>
<span style="font-weight: normal; font-style: normal">functions, state
officials will still retain the responsibility for determining whether a
proposed facility is in fact </span><span style="font-weight: normal">
needed</span><span style="font-weight: normal; font-style: normal"> to
serve the public interest. This responsibility is extremely important,
and it is unlikely to be relinquished to the non-governmental RTOs,
particularly for projects as controversial as new transmission lines. By
issuing a �certificate of public convenience and necessity� or its
equivalent (the name of the document varies from state to state), state
officials confirm that they have reviewed a proposed project, evaluated
the many tradeoffs involved, and concluded that overall the project will
serve the public interest, even though it may adversely affect some
legitimate private or public interests.</span><span style="font-style: normal">
</span></p>
<p class="MsoBodyTextIndent3" style="margin-left:0in;line-height:normal">
<span style="font-size: 12.0pt">In this context, it is important to
recognize that generation siting and transmission siting are inextricably
related. The placement of additional generation in relation to load
centers and transmission bottlenecks can increase or decrease the need for
new transmission facilities. Planning and siting officials will need to
take these effects into account.</span></p>
<p class="MsoBodyTextIndent3" style="margin-left:0in;line-height:normal">
<span style="font-size: 12.0pt">In some areas of the country where natural
gas is readily available at low cost (e.g., the Gulf Coast), generation
providers have filed applications for transmission interconnections for
new generation well in excess of projected load growth in the surrounding
area.<a href="#_edn4" name="_ednref4" title><span class="MsoEndnoteReference"><![if !supportFootnotes]>[iv]<![endif]></span></a>
If built, this generation would serve more distant markets, and additional
transmission capacity could well be needed to enable the generators to
reach those markets. Further, some parties think that that natural gas
pipelines are likely to be generally cheaper and less environmentally
intrusive than electric transmission lines, and most analysts agree that
new generation capacity should be built as close as practicable to the
load centers it would serve. </span></p>
<p class="MsoBodyTextIndent3" style="margin-left:0in;line-height:normal">
<span style="font-size: 12.0pt">Accordingly, when a new "long line"
transmission facility is proposed, opponents may argue that the facility
is not needed because new generation could be built near the load center.
However, load centers tend to be heavily urbanized areas; they may have
air quality problems; and they may lack the water supplies needed for new
generation. Without a thorough assessment of these considerations,
decision-makers will find it difficult to answer questions about the
feasibility and desirability of building a sufficient quantity of new
generation near the load center. The need to consider other alternatives
to new transmission capacity (e.g. distributed generation, or improving
existing transmission) will broaden the analytic requirements of the
process even further.</span></p>
<p class="MsoBodyTextIndent3" style="margin-left:0in;line-height:normal">
<span style="font-size: 12.0pt">This complex of issues (the merits of
local generation and other local alternatives versus distant generation
plus transmission) has three significant implications:</span></p>
<p class="MsoBodyTextIndent3" style="text-indent: -.25in; line-height: normal">
<span style="font-style: normal; font-variant: normal; font-weight: normal">
</span><span style="font-size: 12.0pt">It increases the potential
for disagreement between or among states concerning the need for new
transmission capacity, and suggests that states should be cautious about
approving new generation capacity without inquiring whether such capacity
may lead to transmission congestion and the need for new transmission
capacity in neighboring states. At a minimum, generation and transmission
siting decisions increasingly require extensive communication and
coordination among states across a region. Approval of an interstate
transmission project, for example, requires the affected states to come to
an implicit or explicit understanding of how the economic and social costs
and benefits of the project are to be distributed. To address these
requirements, the states will need to develop or build upon existing
institutions for regional cooperation.</span></p>
<p class="MsoBodyTextIndent3" style="line-height:normal">
<span style="font-size: 12.0pt">For example, CREPC, which operates under
the auspices of the Western Governors� Association and the Western
Interstate Energy Board, is in the process of developing a common
transmission siting protocol for the eleven states in the Western
Interconnection.</span></p>
<p class="MsoBodyTextIndent3" style="text-indent: -.25in; line-height: normal">
<span style="font-size: 12.0pt">2</span><span style="font-style: normal; font-variant: normal; font-weight: normal">
</span><span style="font-size: 12.0pt">The regional planning process that
FERC has already flagged as an RTO function is becoming increasingly
important and urgent. However, this planning will need to go well beyond
transmission, to include generation requirements, generation siting,
natural gas pipeline capacity requirements, distributed generation,
alternatives to traditional transmission capacity, and so on. New AC
transmission capacity is almost certainly needed in some areas, but siting
it will not be politically feasible unless all of the alternatives have
been examined and it can be shown that new conventional transmission is in
fact the superior choice.</span></p>
<p class="MsoBodyTextIndent3" style="text-indent: -.25in; line-height: normal">
<span style="font-style: normal; font-variant: normal; font-weight: normal">
</span><span style="font-size: 12.0pt">A transparent and inclusive
regional planning process will be critical to minimizing delay and
controversy in state-run transmission siting and permitting processes.
Although the states will retain responsibility for the determination of
need and approval of routes, they will find the output of a well-run RTO
planning process very useful. For example, Michael Dworkin, chair of the
Vermont Public Service Board, told FERC that such plans could aid state
officials in dealing with transmission or transmission-related projects in
a number of respects. He listed four possibilities, in order of ascending
significance for state regulators:</span></p>
<ul>
<li>
<p class="MsoBodyTextIndent3" style="text-indent: -.25in; line-height: normal; margin-left: .75in">
<span style="font-size: 12.0pt">A plan could provide a catalogue of
up-to-date planning information.</span></li>
<li>
<p class="MsoBodyTextIndent3" style="text-indent: -.25in; line-height: normal; margin-left: .75in">
<span style="font-size: 12.0pt">A plan could provide a threshold
credibility test for proposed projects �projects that would not fill a
niche in the plan at a minimum would require substantial additional
supporting information.</span></li>
<li>
<p class="MsoBodyTextIndent3" style="text-indent: -.25in; line-height: normal; margin-left: .75in">
<span style="font-size: 12.0pt">Projects that met certain criteria in a
regional plan might qualify, at least to some degree, for regulatory
pre-approval or streamlined regulatory treatment.</span></li>
<li>
<p class="MsoBodyTextIndent3" style="text-indent: -.25in; line-height: normal; margin-left: .75in">
<span style="font-size: 12.0pt">Finally, certain needs might be
identified in a plan as being of such urgency or importance as to create
a degree of responsibility on the part of state officials to ensure that
the needs would be met in one way or another.<a href="#_edn5" name="_ednref5" title><span class="MsoEndnoteReference"><![if !supportFootnotes]>[v]<![endif]></span></a></span></li>
</ul>
<p class="MsoBodyTextIndent3" style="margin-left:0in;line-height:normal">
<i><span style="font-size: 12.0pt; font-weight: 700">Conclusion:</span></i><span style="font-size: 12.0pt">
The RTOs� planning processes will be very important, because they will
substantially affect and guide the evolution of regional bulk power
systems. One of the principal user groups of the plans will be the state
regulators, who will need to participate actively and sometimes
collectively in the development of the plans in order to ensure that the
results will meet their needs. Further, the plans will help to focus the
attention of state officials on specific regional policy questions that
need their cooperative attention.</span></p>
<p class="MsoBodyTextIndent3" style="margin-left:0in;text-align:justify;
line-height:normal"><span style="font-size: 12.0pt"> </span><b><i><span style="font-size: 12.0pt">Federal
Preemption and the Need for Regional Cooperation on Transmission Planning
and Siting. </span></i></b><span style="font-size: 12.0pt">The threat of
federal preemption creates another incentive for the states to pursue
regional cooperation. Although the momentum behind the Administration�s
proposal to preempt state siting authority<a href="#_edn6" name="_ednref6" title><span class="MsoEndnoteReference"><![if !supportFootnotes]>[vi]<![endif]></span></a>
(at least in certain situations) for new transmission facilities may have
ebbed for the time being, for the longer term the possibility of
preemption is still very real. Part of the difficulty in supporting the
case for preemption today is that it is hard to find more than a few
examples of the inability of states to cooperate in the expeditious review
of proposed new interstate transmission projects.<a href="#_edn7" name="_ednref7" title><span class="MsoEndnoteReference"><![if !supportFootnotes]>[vii]<![endif]></span></a>
However, to a significant extent this may only reflect the dramatic
decline during the 1990s of transmission investment in general. </span>
</p>
<p class="MsoBodyTextIndent3" style="margin-left:0in;text-align:justify;
line-height:normal"><span style="font-size: 12.0pt">Now the need for new
transmission investment (or suitable alternatives, as mentioned above) is
becoming acute in many areas of the nation. It is reasonable to expect
that the frequency of proposed new interstate transmission projects will
increase, and that this will raise many new issues that states will be
able to address only through regional cooperation. In short, the states
appear to have a window of time in which to demonstrate that they are able
to cooperate on regional transmission-related issues. Given the critical
economic importance of the transmission grids, if the states do not
demonstrate success in this area, the case for federal preemption will
become much stronger.</span></p>
<p class="MsoBodyTextIndent3" style="margin-left:0in;line-height:normal">
<b><span style="font-size: 12.0pt">RTOs and the Formation of Other Kinds
of Regional Electricity Organizations, Public and Private. </span></b>
<span style="font-size: 12.0pt">The formation of a powerful organization
typically affects the broader constellation of related organizations in
the affected functional area. One might expect that the emergence of an
RTO would lead to the formation of a variety of other public and private
organizations of similar geographic scope, orbiting around the RTO, as it
were. For example, the North American Electric Reliability Council (NERC)
may reconfigure its regional councils (or subunits of those councils) to
match RTO boundaries. </span></p>
<p class="MsoBodyTextIndent3" style="margin-left:0in;line-height:normal">
<span style="font-size: 12.0pt">However, if FERC has its way, eventually a
network of RTOs will be established across the nation, and the differences
among them, at least within the Eastern and Western Interconnections, will
be minimal. Ideally, the �seams issues� would disappear. This could mean
that many private companies would become relatively indifferent to RTO
boundaries, although some national or multi-regional firms or
non-government organizations might still find it appropriate to subdivide
themselves into RTO-related units. </span></p>
<p class="MsoBodyTextIndent3" style="margin-left:0in;text-align:justify;
line-height:normal"><span style="font-size: 12.0pt">How this evolution unfolds
will probably depend to a considerable extent on how successful FERC is in
minimizing the organizational and cultural differences between RTOs. If
despite FERC�s best efforts, RTOs display significant idiosyncrasies, the
organizations that need to deal with them on a day-to-day basis will have
to invest more resources in being geared up to deal with them as specific
regional organizations, as opposed to dealing with them more generically.
How this evolution will proceed is full of uncertainties, but it will be
interesting to watch.</span></p>
<div style="mso-element:endnote-list">
<![if !supportEndnotes]><br clear="all">
<hr align="left" size="1" width="33%"><![endif]>
<div style="mso-element:endnote" id="edn1">
<p class="MsoEndnoteText"><a href="#_ednref1" name="_edn1" title>
<span class="MsoEndnoteReference"><![if !supportFootnotes]>
<span style="font-size: 10.0pt; font-family: Times New Roman">[i]</span><![endif]></span></a>
FERC, Order No. 2000, pp. 323-324.</div>
<div style="mso-element:endnote" id="edn2">
<p class="MsoEndnoteText"><a href="#_ednref2" name="_edn2" title>
<span class="MsoEndnoteReference"><![if !supportFootnotes]>
<span style="font-size: 10.0pt; font-family: Times New Roman">[ii]</span><![endif]></span></a>
It is plausible to regard the regional panels of state commissioners
that were recently created to provide input to FERC on RTO-related
matters as precursors of more formal organizations.</div>
<div style="mso-element:endnote" id="edn3">
<p class="MsoEndnoteText"><a href="#_ednref3" name="_edn3" title>
<span class="MsoEndnoteReference"><![if !supportFootnotes]>
<span style="font-size: 10.0pt; font-family: Times New Roman">[iii]</span><![endif]></span></a>
�Options for Resolving Rate and Transition Issues in Standardized
Transmission Service and Wholesale Electric Market Design,� April 10,
2002, pp. 14-17. The paper is available at the FERC website.
</div>
<div style="mso-element:endnote" id="edn4">
<p class="MsoEndnoteText"><a href="#_ednref4" name="_edn4" title>
<span class="MsoEndnoteReference"><![if !supportFootnotes]>
<span style="font-size: 10.0pt; font-family: Times New Roman">[iv]</span><![endif]></span></a>
See, for example, comments presented by a Southern Company
representative at a U.S. Department of Energy workshop in Atlanta,
September 26, 2001.</div>
<div style="mso-element:endnote" id="edn5">
<p class="MsoEndnoteText"><a href="#_ednref5" name="_edn5" title>
<span class="MsoEndnoteReference"><![if !supportFootnotes]>
<span style="font-size: 10.0pt; font-family: Times New Roman">[v]</span><![endif]></span></a>
See FERC website for transcript of RTO Week Conferences, Oct. 16,
2001, pp. 213-215.</div>
<div style="mso-element:endnote" id="edn6">
<p class="MsoEndnoteText"><a href="#_ednref6" name="_edn6" title>
<span class="MsoEndnoteReference"><![if !supportFootnotes]>
<span style="font-size: 10.0pt; font-family: Times New Roman">[vi]</span><![endif]></span></a>
See <i>National Energy Policy </i>(Report of the National Energy
Policy Development Group, May 2001), Ch. 7, pp. 7-8.</div>
<div style="mso-element:endnote" id="edn7">
<p class="MsoEndnoteText"><a href="#_ednref7" name="_edn7" title>
<span class="MsoEndnoteReference"><![if !supportFootnotes]>
<span style="font-size: 10.0pt; font-family: Times New Roman">[vii]</span><![endif]></span></a>
Ironically, it appears that at least in the western U.S., where large
areas are under federal ownership, obtaining consent from federal land
management agencies for the siting of new transmission facilities has
been a more serious obstacle than gaining state approval.
<hr>
<p class="MsoEndnoteText"><font size="2"><a name="meyer"></a>David H.
Meyer is the author and publisher of the <b><i>ELECTRICITY POLICY
OBSERVER</i></b>, a monthly newsletter. This article was first
published in the <b><i>OBSERVER</i></b>�s inaugural edition on April
24, 2002. To inquire about subscribing to the <b><i>OBSERVER</i></b>,
offer comments on this article, or learn more about David Meyer,
please write to <u><a href="mailto:[email protected]">
[email protected]</a></u>. A website for the <b><i>OBSERVER</i></b>
is under development at <a href="http://www.elecpolicyobsv.com">
http://www.elecpolicyobsv.com</a>.</font><font face="Times New Roman" size="2">
</font></div>
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