FERC Filings
MOTION TO INTERVENE AND PROTEST OF ELECTRIC POWER SUPPLY ASSOCIATION-Entergy Services, Inc.-Docket No. RT01-75-000
A. Independence (Characteristic No. 1)
1. The proposed structure of the Transco, and the reservation of authority by the Transco instead of assigning certain functions from the SPP RTO, fail to satisfy Order No. 2000’s independence requirement for RTOs.
In Order No. 2000, the Commission reiterated its earlier statement that “the principle of independence is the bedrock upon which the ISO must be built,” specifically noting that “[a]n RTO needs to be independent in both reality and perception.” The Commission also made it clear that while an RTO may delegate the authority to carry out certain of its responsibilities, in order to preserve the intent of Order No. 2000, final oversight authority and approval must always reside in the RTO.
Entergy’s April 1999 Petition for Declaratory Order, in which the initial Transco proposal was set forth, created concern among potential stakeholders and market participants over, inter alia, the true independence of the Transco. The Commission’s Declaratory Order, granting Entergy’s motion, provided guidance on the creation of a Transco within the SPP that would satisfy the requirements of an RTO.
For example, the Commission ordered Entergy to provide more detailed proposals for (1) board selection and removal, (2) the fiduciary duty of the board, (3) the attraction of capital, (4) contracting with Member companies, and (5) the ability of Transco employees to move laterally between Member Companies.
In its October 16, 2000 filing, Entergy claimed that the revised proposal alleviated the concerns raised in the Declaratory Order, particularly those related to governance of the Transco, by “allowing the Transco to operate under the oversight of the SPP,” which “would provide an additional layer of independence,” and an additional layer of protection against control by Entergy over the Transco’s operations. Entergy did not suggest in its proposal that it intended the Transco to qualify as an RTO; however, Entergy has reserved certain functions for its Transco that should properly be performed by the SPP RTO, indicative of Entergy’s intent to operate the Transco independently of the SPP RTO.
Entergy’s assertion that joining forces with SPP will create “an additional layer of independence,” which will protect “against the possibility that Entergy, or other Market Participants, might exercise control over the Transco’s operations,” is an illusory assertion, given Entergy’s reservation of rights for its Transco. The manner in which Entergy has reserved numerous responsibilities for its Transco permits the Transco to avoid the oversight and authority of the SPP RTO, thereby compromising the objectives sought to be fulfilled under Order No. 2000, including, but not limited to, independence. Either the Entergy Transco is an RTO or it is not, in which case it must be part of an RTO, like the SPP. If Entergy indeed intends for the Transco to be independent of the SPP RTO, then the Transco must be able to independently meet all eleven requirements of an RTO, as set forth in Order No. 2000 and clarified in Order No. 2000-A. EPSA requests that the Commission reject those aspects of Entergy’s filing not consistent with the eleven requirements of an RTO, and require the SPP RTO to have final oversight and review over Transco’s operations, as discussed below.