FERC Filings

MOTION TO INTERVENE AND PROTEST OF ELECTRIC POWER SUPPLY ASSOCIATION-Southern Company Services, Inc.-Docket No. RT00-77-000

The lack of stakeholder participation has not resulted in the development of a meaningful proposal.

Southern has drafted its RTO proposal without providing for meaningful stakeholder representation during the formation process, although Southern has met with certain EPSA members to discuss Southern’s proposal after its unveiling. As a result, Southern’s proposed RTO is biased towards service of Southern’s load and generation.
Southern itself claims that its RTO proposal is designed to “maintain shareholder value while participating in an RTO.” This pronouncement is revealing. EPSA believes that any transmission assets that are assigned to an RTO should maintain shareholder value as the costs-of-service are recovered through the transmission rates, together with a return on equity for shareholders as well as satisfaction of appropriate performance standards. As Southern recognizes in its filing, performance-based rates are available, together with other incentives. EPSA believes that Southern adequately can guard against any potential loss of shareholder value with respect to its transmission assets through RTO rate design. Southern’s underlying concern regarding a loss of shareholder value must, therefore, arise from its investment in generation and the potential impacts on that generation should its transmission system be utilized to provide truly comparable service on a non-discriminatory basis.
In short, Southern’s RTO appears to be designed to protect Southern’s generation dominance and its generation assets. As such, it is not surprising that Southern has not engaged stakeholders in a meaningful manner in the development of its RTO proposal. Such stakeholder participation during the formation process is critical to the Commission being presented with RTO proposals that advance the public interest, not simply the transmission owner’s objectives (or in this case, the incumbent generation owner’s objections). Furthermore, a strong committee system with meaningful stakeholder participation is critical to ensuring the independence of an RTO. The same level of stakeholder representation on the various committees must be provided for during the formation process to ensure a balanced proposal. Meaningful stakeholder representation on formation committees would provide balance between the public interest of optimizing the utilization of the transmission grid and the objective of maximizing value for Southern’s shareholders, which are not necessarily aligned.
Unbelievably, Southern states in its Petition that a “public ‘stakeholder’ negotiation process could interfere with the progress that has been (and continues to be) made.” This lack of consideration of stakeholder input compromises the perception of the construction of an independent RTO, if not the reality, in contravention of Commission policy. EPSA believes that a meaningful stakeholder participation process would promote efficient use of the Commission’s resources, as the Commission will not be inundated with protests and complaints from stakeholders who have been shut out of the development process. Due to this significant shortcoming in Southern’s filing, EPSA urges the Commission to take a more active role in promoting consensus, including the use of formal dispute resolution procedures.
 Petition at 8.
 Petition at 12.
Order No. 2000, Fed. Reg at 853 (n. 301).

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