FERC Clarifies Market-Based Regulatory Burden

By Published On: June 25, 2005

The Federal Energy Regulatory Commission has streamlined reporting requirements for public utilities making power sales at market-based rates, which were imposed in February. With Order No. 652, issued on February 10, the commission set uniform standards on all market-based-rate sellers by eliminating the option given to public utilities that allowed them to delay reporting status changes until submission of the triennial review. As a result, utilities had to join other power marketers in reporting changes in generation or transmission ?control? within 30 days. Responding to requests for rehearing from Constellation, Reliant, the Edison Electric Institute (EEI), and others, FERC clarified the regulatory burden imposed on utilities. FERC granted five of the six changes EEI sought, according to Tonja Wicks, the trade association?s director of federal agency relations. The enhancements, according to Wicks, included FERC?s clarifications that there is no need to report a contract for a fixed quantity of delivered energy that does not confer a change in control, a new power plant until it actually delivers energy, or increases in transmission capacity that are due to network upgrades. The clarifications came in an order on rehearing approved at the commission?s June 15 meeting and issued June 16. Rejected, according to FERC, was EEI?s request for rehearing on the ground that Order No. 652 is impermissibly vague. The order did not impose new requirements, the commission pointed out, but standardized preexisting obligations. Wicks said the commission granted requests to adopt a netting approach, which means that partially offsetting increases and decreases do not have to be reported until they result in a 100 MW cumulative change. Another clarification, Wicks said, means utilities? unregulated merchant power units are not responsible for reporting activities of their parent utility.

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