FERC Rules on Market-Power Report Deadlines, Wind Connections

In an attempt to address a potential or real problem of one company wielding unjust market power, the Federal Energy Regulatory Commission officially ruled this week that wholesale power marketers must file market analysis reports on time or lose the authority to earn a market-based rate on their sales. The commission explained that it allows wholesale electric power sales at market-based rates if the seller and its affiliates do not have, or have adequately mitigated, market power in generation and transmission. As a condition of an authorization to sell power at market-based rates, the company must file an updated market-power analysis every three years. Market-based rates have the potential for making companies increased profits, instead of relying on regulated rates. Pointing out that more than 200 companies are out of compliance with these regulations, FERC adopted an order May 25 stating that companies that have been delinquent in filing updated or revised market analyses will have their market-based rate authority revoked if they do not file those reports initially within 60 days of the order being published in the Federal Register and in the future after they become delinquent. The order is part of a proceeding to determine whether the rates charged by the more than 200 listed companies remain ?just and reasonable.? In other actions this week, FERC proposed revisions to its Uniform System of Accounts and financial reporting requirements to reflect restructuring in the electric industry and to provide greater transparency regarding transmission and market-related costs of electric utilities, including regional transmission organizations (RTOs). The notice of proposed rulemaking includes new schedules in the FERC annual and quarterly financial reports that will provide greater details concerning transmission service, market-related services, and generator interconnection studies performed by public utilities, including RTOs, the commission explained. The proposals would also create a new schedule in the reports to provide details concerning the types of costs that public utilities are recording as power-purchase expenses. The commission also finalized a rule addressing the interconnection requirements for wind power facilities larger than 20 MW. ?The rule recognizes the technical differences in the design and operational characteristics of wind generating technology, and benefits customers by removing unnecessary obstacles to further development of wind generating resources while ensuring that reliability is protected,? FERC stated in its order. FERC explained that the rule addresses concerns of wind turbine manufacturers and wind power developers who sought standardized interconnection requirements. The industry felt meeting widely varying standards across the country contributes to increased manufacturing costs for wind generators and serves as a barrier to development. FERC Rejects Limits on Open-Season Rules The three-decade-old effort to transport Alaska?s natural gas to the lower 48 states was back on the Federal Energy Regulatory Commission?s agenda when the commission responded to requests that it clarify or repeal parts of the open-season rules issued February 9 as part of the substantive ?Order 2005.? FERC maintained that design changes at the conclusion of the open-season process may be mandated. The request came from Alaska, Enbridge, Chevron, and a joint filing by North Slope producers ExxonMobil, BP, and ConocoPhillips. The commission may require design changes in any pipeline proposal that are necessary to ensure that some portion of a proposed voluntary expansion will be allocated to new shippers or shippers seeking to transport gas from areas other than the Prudhoe Bay or Point Thomson areas, provided that these shippers agree to sign qualifying, long-term transportation contracts.

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FERC Rules on Market-Power Report Deadlines, Wind Connections

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