FERC Filings
COMMENTS OF EPSA, INDUSTRY RELIABILITY
I.
On May 17, 2000, the Federal Energy Regulatory Commission (Commission or FERC) issued a Notice of Interim Procedures to Support Industry Reliability Efforts and Request For Comments (Notice). In that Notice, the Commission announced a number of specific actions to be implemented on an interim basis this summer to enhance our industry's efforts to maintain reliability. In addition to comments on its own measures, the Commission solicited the views of industry participants on both short-term and longer-term measures the Commission and others could take to alleviate reliability stresses. On June 2, 2000, the Electric Power Supply Association (EPSA) submitted comments, applauding the Commission's initiative and proposing additional short-term interim measures. Comments on longer-term initiatives are due by June 30, 2000.
EPSA welcomes this opportunity to present long-term reliability measures for the Commission to consider. The reliability of today's electricity system and robust, well-functioning competitive markets are inextricably linked. Therefore, it is vitally important for the Commission to take all possible actions to ensure that all market participants are treated fairly and comparably, and to remove obstacles to the successful completion of transactions in wholesale power markets. In our June 2nd filing, EPSA recommended four additional interim steps to improve competition and reliability this summer and next while RTO formation is underway: (1) eliminate the capacity benefit margin (CBM); (2) require that independent entities calculate Level 3 available transmission capacity (ATC); (3) require independent Security Coordinators; and, (4) require all service for native load customers to use the pro forma tariff.
EPSA also proposed steps necessary to promote the growth of competitive markets by addressing the potentially adverse effects of certain actions which have had an adverse impact on reliability, including: (1) requiring Transmission Providers to give written notice to the Commission of its use of CBM and to post a notice on their OASIS within 24 hours; (2) requiring OASIS audits; and, (3) requiring the retention of data confirming system conditions existing at the time of a TLR.
Well-designed Regional Transmission Organizations (RTOs) formed under Order No. 2000 could deal with some or all of the threats to healthy markets and reliability that our proposals are intended to address. However, RTOs are not likely to be established for several years. The problems affecting the wholesale transmission system and competitive markets -- and the reliability they help support -- demand more immediate solutions. To the extent that any of these proposals have yet to be adopted as short-term measures, we urge the Commission to consider implementing them now on a long-term basis.
Eliminating price caps and other ISO/RTO market interventions is essential. When considering long-term reliability measures, EPSA strongly recommends that the Commission reject ISO/RTO efforts to intervene in, or manage, markets. As explained in "An EPSA Position Paper: RTOs Must Manage Transmission, Not Power Markets," the primary purpose of ISOs and future RTOs is to operate the transmission system in a reliable, non-discriminatory way. Market interventions are short-sighted and counterproductive, and must be limited. Significant reliability gains can be achieved by allowing competitive generation markets to develop and mature on their own; any effective long-term reliability strategy must incorporate this approach. A copy of our position paper is attached.
Enabling new generation to get onto the power grid must be one of the centerpieces of an effective, long-term strategy to ensure reliability. While EPSA's members are building power plants to meet growing demand in virtually every region of the country, the interconnection of this much needed power remains a problem. Despite some positive steps the Commission has taken in a number of cases to date, the absence of a comprehensive policy statement still leaves this process far too burdensome and time-consuming. Therefore, as a long-term measure, EPSA urges the Commission to standardize interconnection procedures and establish clear and uniform business practices. We also request that the Commission issue a comprehensive policy statement that reflects the principles set forth in the attached "Bill of Rights for New Generation Interconnection."