FERC Floats New Access, Market-Rate Rules

By Published On: May 19, 2006

FERC Floats New Access, Market-Rate Rules In its third attempt to refine federal open-access transmission rules, the Federal Energy Regulatory Commission proposed six methods to prevent discrimination against wholesale generators that need access to transmission lines. Federal regulators also proposed new market-rate standards aimed at avoiding market-power concentration by companies during a May 18 meeting. “The third time’s the charm,” said commission chair Joe Kelliher. He said that instead of using restrictions along the lines of regulators’ last two efforts to reform open access – known as Orders 888 and 889 – this reform “tightens up the tariff itself.” He stressed that the changes would not force utilities to divest transmission assets or require utilities to join regional transmission organizations. The proposed rules are aimed at making “undue” discrimination easier to detect. The reforms would include using consistent methodology to determine available transmission capacity, requiring transmission providers to participate in open regional planning processes, nailing down pricing for imbalances and credits, and penalizing those who do not turn over studies and evaluations to the federal agency. They also remove some penalties that “have needlessly kept wind” power off the grid, noted commissioner Suedeen Kelly. “FERC’s proposal would create more space on the constrained transmission grid for any new generator – including the many wind projects now seeking access,” agreed Rob Gramlich, American Wind Energy Association policy director. A second proposed ruling would change the current analysis that determines whether a seller can charge market-based rates. The rule would change the basis from a four-pronged analysis to a two-pronged one. That is, instead of looking at generation market power, transmission market power, barriers to market entry, and utility affiliate abuse, the analysis would be streamlined to analyze generation and vertical monopoly power. “It is more consistent with antitrust law,” said Kelliher.

Share this story

Not a member yet?

Subscribe Now