|
Server : Apache/2.4.62 System : FreeBSD fbsdweb2.web.rcn.net 14.1-RELEASE FreeBSD 14.1-RELEASE releng/14.1-n267679-10e31f0946d8 GENERIC amd64 User : www ( 80) PHP Version : 8.3.8 Disable Function : NONE Directory : /domains/enrgy/feldman/ |
Upload File : |
<html>
<head>
<title>Electric Articles of Confederation</title>
</head>
<body style="font-family: Arial" vlink="#808080">
<div align="center"><center>
<table border="0" cellpadding="8" cellspacing="0" width="98%" bgcolor="#000000">
<tr>
<td width="100%" valign="middle"><a name="top"></a><img src="../images/pmamagsm.gif" alt="PMA Online Magazine" border="0" align="right" WIDTH="229" HEIGHT="100"></td>
</tr>
</table>
</center></div><div align="center"><center>
<table border="0" cellpadding="8" width="98%">
<tr>
<td width="25%" valign="top" align="center">
<!--webbot bot="Include" U-Include="wv_sidebar.htm" TAG="BODY" startspan -->
<table border="0" cellpadding="8" width="98%" id="table1">
<tr>
<td width="25%" valign="top" align="center"><map name="FPMap0_I1">
<area href="http://www.powermarketers.com/adrates.html" shape="rect" coords="14, 297, 97, 322">
<area href="http://www.powermarketers.com/pmajobs.htm" shape="rect" coords="11, 230, 95, 257">
<area href="http://www.powermarketers.com/main.htm" target="_parent" shape="rect" coords="12, 163, 96, 189">
<area href="http://www.powermarketers.com/power2.htm" target="_blank" shape="rect" coords="12, 95, 96, 121">
<area href="../pmamag.htm" shape="rect" coords="11, 29, 96, 54"></map>
<img rectangle="(12,163) (96,189) http://www.powermarketers.com/main.htm##_parent" rectangle="(12,95) (96,121) http://www.powermarketers.com/power2.htm##_blank" rectangle="(11,29) (96,54) ../pmamag.htm" src="../images/magmenu.gif" alt="PMA OnLine Magazine Menu" border="0" align="center" usemap="#FPMap0_I1" width="110" height="350"><p>
<a href="../searchpma.htm">
<img src="../images/archives.gif" alt="Archives Search" border="0" align="center" WIDTH="70" HEIGHT="40"></a></p>
<p align="left"><font face="Arial"><strong><small>About The Author:<br>
<br>
</small></strong><span lang="X-NONE" style="color: black"><font size="2">
ROGER FELDMAN, Co-Chair of Andrews Kurth LLP Climate Change and Carbon
Markets Group has practiced law related to the finance of environmental and
energy projects and companies for 40 years. In particular, he has analyzed
and executed a wide variety and substantial value of project financings. He
chairs the American Bar Association’s Committee on Carbon Trading and
Finance, serves on the Board of the American Council for Renewable Energy,
and has been a senior official in the Federal Energy Administration. He is
a graduate of Brown University, Yale Law School and Harvard Business School.</font></span></font></p>
<p class="BodyText05DS" align="left" style="text-align:left"> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p><a href="#top">
<img src="../images/b-t-top.gif" alt="Back To Top" border="0" WIDTH="71" HEIGHT="35"></a></td>
</tr>
</table>
<!--webbot bot="Include" i-checksum="19883" endspan --></td>
<td width="75%" valign="top"><img src="../images/feldman.gif" alt="Washington Viewpoint by Roger Feldman" border="0" WIDTH="375" HEIGHT="75"><p><b><u>April 1999</u><br>
</b></p>
<b><font FACE="Palatino" SIZE="5"><p></font><font face="Arial" size="6">Electric Articles
of Confederation</font></b></p>
<p><strong>by Roger Feldman -- Bingham, Dana and Gould, P.C.<br>
</strong><font face="Arial" size="2">(<em>originally published by PMA OnLine Magazine:
04/99</em>)</font></p>
<p> <font FACE="Palatino" SIZE="2"></p>
<p ALIGN="JUSTIFY"></font><font face="Arial">Transmission governance clearly is the great
regulatory battleground now that, more and more states are falling into line with
FERC’s open access leadership. It is also the fault line between the utilities which
have fallen back to the regulated customer distribution service strategy; the major power
supply independents (mostly, though not exclusively, utility affiliates); and the
mega-customers who have been the drivers for integrated national transmission operations.</font></p>
<p ALIGN="JUSTIFY"><font face="Arial">FERC, the prime arbiter in the absence of
Congressional action, which started out in favor of various democratic ISO mechanism
recently has been increasingly susceptible to call for private transcos. Now it is having
to assimilate the demands of the big consumers (as well as some mega utilities) for big
national RTOs. We trace its wavering path below from insular New England to the strife
torn Midwest to the self-certain Hamiltonian halls of ELCON.</font></p>
<p ALIGN="JUSTIFY"><strong><font face="Arial">New England and the New
Disestablishmentarianism</font></strong></p>
<p ALIGN="JUSTIFY"><font face="Arial">The traditional power barons there generally have
fallen back to power transmission (linked, perhaps, to other customer services) as their
strategy. Now they are stumbling. The battle for governance of the local ISO received a
strong populist affirmation from FERC last month. It rejected the efforts of NEPOOL’s
utility members to retain unassailable control of the formula that determined voting power
(Docket No. ER 99-1142-000). An acceptable plan according to FERC would be one of
sectorial governance such as that in PJM which provides for equal votes respectively for
general owners, other suppliers, transmission owners, electric distributors, and end-use
customers.</font></p>
<p ALIGN="JUSTIFY"><font face="Arial">FERC did so, however, with a genteel restraint
– asking NEPOOL to go back and try yet again to do it right. That approach provoked a
spirited dissent from Commissioner Massey, who was concerned with the impact on important
NEPOOL decisions of the permitted absence of immediate reform. It seems he was right. The
traditional denizens of the commanding heights are now asserting that during the interim
period while a new NEPOOL management "consensus" is being forged for FERC
review, the old rules should continue to apply – even though major issues, such as
congestion management, are slated to be resolved.</font></p>
<p ALIGN="JUSTIFY"><strong><font face="Arial">Midwest and the New Dissension</font></strong></p>
<p ALIGN="JUSTIFY"><font face="Arial">Meanwhile, FERC has been reaching out through
consultation sessions with State Utility Commissioners (RM 99-2) regarding the creation of
Regional Transmission Organizations (RTOs), in probable preparation for a rulemaking. The
one clear theme of the sessions has been diversity: the regionality of the response,
reflecting – in part – the conflicts of different utility strategies adapted
under regional circumstances. While some ISOs, like PJM, are pleased with their compact
size (though large volume of transactions), others – notably in the strifetorn Middle
West – cry out for vigorous outside Federal action under Section 202(b) of the
Federal Power Act to force all players under a big tent. Likening the proposed
conditionally approved Midwest ISO to "Swiss cheese" because of its gaps, some
State regulators, actually accused non-RTO utility participants of an intention to act
discriminatorily. The conflict between the region’s major proposed "transco
lite" (proposed by the Transmission Alliance, a group of major utilities) and the
MISO was characterized as promoting regional fragmentation. MISO, incidentally, is the
first ISO not proposed by a powerpool, and is not planned to be a control center.
Commonwealth Edison has itself proposed to form a transco, which would be a member of the
MISO.</font></p>
<p ALIGN="JUSTIFY"><strong><font face="Arial">Elcon and the New Nationalism</font></strong></p>
<p ALIGN="JUSTIFY"><font face="Arial">While FERC grapples with the "soft" issues
of democracy, diversity and equity in New England and the Midwest, the folks who brought
us open access – and have already benefited far more mightily than anyone else from
it – have a simpler vision. Asserts Elcon: End the debate; and create 3
interconnection-wide RTOs covering large geographic regions. Several good arguments are
presented: minimize loop flow; avoid utility manipulation of power flows for their own
self interest; and provide overall control of transcos and ISOs. The leitmotif is one of
dissatisfaction with ISOs as they are emerging. In Elcon’s view, they are small,
bureaucratic, trader unfriendly. Even, suggests Elcon – perhaps thinking of NEPOOL -
ISOs are guilty of acting like monopolists. Big customers and big traders favor big
competitive markets.</font></p>
<p ALIGN="JUSTIFY"><font face="Arial">So many "News..." FERC has been left to
preside over an Electric Articles of Confederation. As suggested above, this seems like a
conundrum so linked to core interests of power industry players, and so regionalized in
its impacts, that nothing less than the arm wrestling of legislation will do to solve it.
While the public eye has been on retail access and PUHCA repeal, it is in the creation of
a New Transmission "Constitution" that the future of both the electric utility
and the private merchant power industries lies.</font><font FACE="Palatino" SIZE="2"></p>
</font><!--webbot bot="Include" U-Include="wv_bottom.htm" TAG="BODY" startspan -->
<hr color="#FFFF00">
<p class="MsoBodyText" align="left" style="margin-bottom:0in;margin-bottom:.0001pt;
text-align:left"><font face="Arial" size="2">
<span lang="X-NONE" style="color: black">ROGER FELDMAN, Co-Chair of Andrews
Kurth LLP Climate Change and Carbon Markets Group has practiced law related
to the finance of environmental and energy projects and companies for 40
years. In particular, he has analyzed and executed a wide variety and
substantial value of project financings. He chairs the American Bar
Association’s Committee on Carbon Trading and Finance, serves on the Board
of the American Council for Renewable Energy, and has been a senior official
in the Federal Energy Administration. He is a graduate of Brown University,
Yale Law School and Harvard Business School.</span></font></p>
<!--webbot bot="Include" i-checksum="63395" endspan --></td>
</tr>
</table>
</center></div>
<p align="center"><a href="9904flmn.htm#top"><img src="../images/b-t-top.gif" alt="Back To Top" border="0" WIDTH="71" HEIGHT="35"></a></p>
</body>
</html>