FERC Filings
MOTION TO INTERVENE AND PROTEST OF THE ELECTRIC POWER SUPPLY ASSOCIATION-Carolina Power & Light Company , Duke Energy Corporation, South Carolina Electric & Gas Company, GridSouth Transco, LLC - Docket No. RT01-74-000
II. Protest
A. The Filing is Insufficient to Obtain Commission Approval
The filing states that GridSouth “will be formed as an independent, incentive- driven company that will ultimately own and construct electric transmission assets.” (emphasis added) GridSouth will assume “operating responsibility” for the Applicants’ transmission facilities and become an RTO pursuant to a Transmission Operating Agreement (“TOA”), a Limited Liability Corporation Agreement (“LLC Agreement”) and a “form of” GridSouth Open Access Transmission Tariff (“OATT”) with Schedules and Attachments.
The filing does outline some substantive details regarding governance structure and the “functional control” GridSouth would exercise over the Applicants transmission facilities. However, the proposed RTO’s “core contractual documents” are presented as unexecuted “Pro Formas,” missing significant details. The filing does not contain the following: (1) GridSouth’s proposed transmission rates and rate-related terms and conditions; (2) a comprehensive proposal for incentive rates;<sup>2</sup> (3) new market structures, including a centralized balancing market and a market-based congestion management plan; (4) a regional transmission plan; (5) parallel path flow procedures; and (6) an interregional coordination plan.<sup>3</sup>
The Applicants seek a finding that the RTO proposal meets the requirements of Order No. 2000, and that GridSouth “will qualify” as an RTO. The governance provisions and certain aspects of the proposal relating to functional control may provide some basis for Commission guidance in areas where the Applicants provided some detail, subject to the comments and objections explained below. However, rather than a comprehensive RTO solution satisfying the requirements of Order No. 2000, the filing is essentially a report on the status of the efforts to establish an RTO.<sup>4</sup> Under such circumstances, Order No. 2000 states that the Commission can “provide guidance on what steps…are appropriate to help address the obstacles (e.g., further collaborative efforts).”
The hallmark of RTOs is the benefits they can offer in addressing continuing barriers and impediments to effective, robust wholesale competitive markets. The central themes underlying Order No. 2000 is the separation of those who control access to the transmission system from those who are using it and the use of market-based solutions to grid management problems. To accomplish its objectives, Order No. 2000 contemplates substantial changes in the nature of the relationship between transmission providers and customers. In this larger perspective, the GridSouth proposal—largely based upon its existing pro forma tariff--is more rhetoric than substance. Due to the sketchy, prospective nature of the proposal, EPSA believes that a determination that the proposal satisfies Order No. 2000 is premature. EPSA is especially concerned about the following specific aspects of the proposal.
<sup>2</sup> The absence of a more fully developed proposal for incentive rates is a notable deficiency, given the Commission’s views on the important role they can play, particularly in the for-profit Transco model. Order 2000 at 31,182-84.
<sup<3< sup=""> The Applicants exploit virtually every opportunity contained in Order No. 2000 to postpone the development of essential components of a well-functioning RTO critical to robust competitive markets. While Order No. 2000 allows for delayed implementation of planning and expansion requirements, congestion management plans and procedures for internalizing loop flow, the proposal reflects minimal or no effort to establish specific milestones and timetables the Order does require.
<sup>4</sup> In Order No. 2000, the Commission described alternative scenarios utilities may find themselves in by the filing deadline. First, a completed collaborative process that produced a consensus “RTO solution.” Second, Order No. 2000 allows utilities to “make an alternative filing reporting on the status of pertinent RTO formation and development…and the public utility’s plans and timetable for future efforts directed toward RTO formation and participation.” Order No. 2000 at 31,226. The GridSouth proposal falls into the second category.