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Former Standard Market Design Foes Endorse White Paper: Entergy, Two Pacific Northwest Groups Praise FERC

One of the principal criticisms of the Federal Energy Regulatory Commission's (FERC) original Standard Market Design (SMD) rulemaking was that the proposed design did not provide enough regional flexibility. Most of this criticism came from the Southeast and Pacific Northwest regions, and the ensuing debate on SMD had a pronounced effect on the legislative process in Congress as it has moved to craft energy legislation that includes significant impacts on the electric power industry.

FERC issued a series of modifications in a White Paper issued in April 2003, which has resonated with many of these opposing parties. Three such parties, located in the Southeast and Northwest, are now expressing their support for FERC and its revised Wholesale Power Market Platform. Such support builds on a pro-competition legislative trend that has been growing steadily during the past two months.

Entergy Considers Establishment of a Properly Structured RTO to Be in the Best Interests of Its Customers

One of the largest utility systems in the United States, New Orleans-based Entergy Corp., recently sent a letter to Sen. Mary Landrieu, D-La, endorsing the modifications FERC made in the White Paper. "Overall, the White Paper is a positive response by the FERC to the concerns raised by members of the industry, as well as many retail regulators," Entergy CEO J. Wayne Leonard said.

Leonard also said Entergy would not support federal legislation that would delay the establishment of competitive wholesale markets overseen by regional transmission organizations (RTO). "While some others have expressed disappointment with the White Paper and have advocated a delay of SMD, we do not support legislation that would delay implementing SMD. We think that the interests of our native load customers can best be served by moving quickly toward the establishment of a properly-structured RTO for our region," the letter said.

Pacific Northwest Parties Also Complimentary of FERC

Two significant sources of support also have emerged in the Pacific Northwest. Northwest Requirements Utilities (NRU) and Pacific Northwest Generating Cooperative Power (PNGC Power) have filed comments with FERC supporting the White Paper.

"In general, NRU and PNGC Power believe that the White Paper is a pronounced improvement over the original Standard Market Design Notice of Proposed Rulemaking," the July 15, 2003, filing said.

PNGC Power is a generation and transmission cooperative consisting of 15 rural electric distribution cooperatives. NRU is an incorporated trade association representing 47 non-generating and transmission dependent municipal and consumer-owned utilities in the Pacific Northwest.

"That the Commission's final rule will permit the flexibility needed by some regions to adopt some individualized solutions to differing regional transmission needs does not preclude those regions who so desire to "go all the way" if appropriate for them. However, for regions such as the Northwest where flexibility to address unique circumstances is more than merely desirable, but is actually necessary, the Commission's White Paper is a refreshing indication that the Commission has heard our voices," the filing concluded.

For more information, the comments from NRU and PNGC Power can be downloaded from the FERC web site at http://www.ferc.gov, Docket No. RM01-12-000. Or contact EPSA's Douglas Austin at daustin@epsa.org, or call (202) 628-8200.