FERC Filings
MOTION TO INTERVENE AND PROTEST OF ELECTRIC POWER SUPPLY ASSOCIATION-Southern Company Services, Inc.-Docket No. RT00-77-000
Southern’s proposed RTO fails to provide comparability to all users of the system and will continue to maintain the discrimination that exists against non-load serving entities.
Southern’s proposal states that the “Gridco will file a ‘system-wide’ transmission tariff and will be the sole provider of unbundled transmission service over the facilities it operates.” However, Southern then drops a footnote and states “[t]he transmission owning participants of the Gridco will not take service from the Gridco in connection with the transmission component of bundled retail load or native load.” Southern’s pronouncement is not one limited to any transition period, but is unqualified. Accordingly, Southern’s proposed RTO fails to provide comparability to all users of the system and will continue to maintain the discrimination that exists against non-load serving entities. The focal point of the Commission’s comparability rule is the undue discrimination in the rates and services that Southern offers to third parties when compared to its own use of the transmission system. The transmission owner must treat others the same as it treats itself, which is not the case with Southern’s proposal. Thus, the Commission should not only direct Southern to purchase transmission services for its own native load from the tariff, but should also examine whether Southern’s proposal continues to unjustly discriminate against non-load serving entities.
Indeed, generators seeking to develop projects on Southern’s system are encountering significant reservations of transmission capacity by Southern, purportedly to serve native load or as a result of designation of “future resources.” Independent generators, however, are faced with an issue of timing – they generally are not able to identify its customers before they build their facilities, so they cannot make the necessary reservation of transmission capacity, as both point-to-point and network service require an identification of customers. But, if the generators wait until after the facility is operational and customers have been identified, then the transmission capacity likely will not be available. As a result, independent power producers are at a distinct competitive disadvantage because Southern is able to reserve transmission capacity for future resources and to accommodate load growth, while non-load serving entities cannot. Southern is clearly attempting to maintain this competitive advantage through its RTO proposal and the Commission should require the RTO OATT to provide comparability to all users of the transmission system in the ability to reserve transmission capacity.
A review of certain other Order No. 2000 compliance filings (e.g. RTO West, GridFlorida) reveals that this contentious issue of bringing native load under the same tariff has been accomplished. Success elsewhere demonstrates that potential cost-shifts can successfully be mitigated even in regions in which there presently is no retail competition. EPSA urges the Commission to review the steps taken by other RTOs to bring native load under the regional open access tariff and direct Southern to, at a minimum, propose a transition plan for RTO participants to take all transmission services under the tariff. This is particularly appropriate in light of the fact that Southern’s RTO proposal does little, if anything, to promote more regional transmission access or development of broader competitive wholesale markets.
The development of a seamless national transmission system wherein all transmission usage is accorded fully comparable treatment is vitally important to the growth of a competitive electric power industry. Bringing native load under the RTO tariff is an important step towards that end. With actual comparability, the transmission owners’ interests should be to operate the grid as a stand-alone business and maximize throughput and not favor their own generation and service. With incentives aligned in this manner, the transmission operator is expected to facilitate those regional transactions that make the most business sense.
In its recent “Staff Report to the Federal Energy Regulatory Commission on the Bulk Power Markets in the United States, Part II,” the FERC staff reached a similar conclusion about the need for comparability. On page 2-49, the staff outlines the advantages of putting all uses of the system on a single tariff:
Reduce the advantages of network service over point-to-point service by requiring that native load be served under the same tariff provisions as other transmission services. Given that all transactions serve load of one sort or another, all load would be treated in the same manner. This would eliminate the current incentives that vertically integrated transmission owners have to favor their native load through the manner and method of calculating ATC and handling interconnection requests. It would also restore confidence among market participants that transmission owners were not calling TLRs to favor native load, because they would not longer have the incentive to do so.
Thus, comparability is critical if competitive power markets are to achieve their full potential.