Per Mr. Steven Kean, of Enron Corp. please see below ( Appendix C - Order 8=
88=20
"Allegations of Public Utilities Exercising Transmission
Dominance).=20

APPENDIX C

Allegations of Public Utilities Exercising Transmission Dominance

I. Examples From Proceedings Before Administrative Law Judges

These are examples of allegations that various public

utilities have refused to provide comparable service, either

through refusals to wheel, dilatory tactics that so protracted

negotiations as to effectively deny wheeling, refusals to provide

service priority equal to native load, or refusals to provide

service flexibility equivalent to the utility's own use.

A. American Electric Power Service Corp. (AEP)

In 1993, AEP filed, on behalf of its public utility

associate companies, an open access tariff that offered only firm

point-to-point service with very limited flexibility. It did not

offer network service, flexible point-to-point service, or non-

firm service. Thus, it did not provide customers with the same

flexibility that AEP itself has. Nor did it provide a service

priority equivalent to that enjoyed by native load. The

Commission set AEP's tariff for hearing and, on rehearing, held

that in order not to be unduly discriminatory, the tariff had to

offer comparable service. American Electric Power Service Corp.,

64 FERC =0F4 61,279 (1993), reh'g, 67 FERC =0F4 61,168 (1994). =
=20

At hearing, Raj Rao of Indiana Michigan Power Agency (IMPA)

(Ex. IMPA-1, Feb 23, 1994) and Kenneth Hegemann of American

Municipal Power-Ohio, Inc. (AMP-Ohio) (Ex. AMPO-1, Feb 23, 1994),

both senior management officials, testified concerning AEP's
=0F,

- 2 -

alleged discriminatory practices. 1/ AMP-Ohio is an

association of municipalities in Ohio, some of whose members

depend on AEP for transmission and partial requirements service.=
=20

IMPA is an association of municipalities in Indiana, and many of

IMPA's loads are captive to the AEP transmission system. The

witnesses alleged as follows:=20

1. In anticipation of high peak demands, AEP would

contract for large blocks of available short-term power,

withhold sale of short-term power, refuse to transmit third

party short-term power, and require purchases from AEP at

the emergency rate (100 mill/kwh) when an emergency might

not exist. Ex. AMPO-1 at 6.

2. In December 1989, AMP-Ohio negotiated a 20 MW

purchase of short-term power from Louisville Gas & Electric

Company (LG&E). AEP refused to wheel because LG&E had

earlier that day told AEP it had no power to sell to AEP.=20

AEP then bought the power from LG&E and offered to resell it

to AMP-Ohio. Ex. AMPO-1 at 6-7.

3. In January 1990, AMP-Ohio solicited bids for

February power purchases from a number of utilities

including AEP. AEP was not the winning bid. AMP-Ohio made

arrangements to purchase the power from four winning bidders

and sought transmission through AEP. When AMP-Ohio gave AEP
=20

1/ After the Rehearing Order expanding the scope of the
proceeding, AMP-Ohio and IMPA withdrew this testimony as no
longer necessary. This withdrawal does not change the fact
that the testimony was sworn to under oath.
=0F,

- 3 -

the schedule for delivery, AEP refused to transmit the

power, matched the average price of the winning bids, and

made the sale itself. Ex. AMPO-1 at 7.

4. In August 1993, an AMP-Ohio member (Columbus, Ohio)

was purchasing 10 MW of hourly non-displacement power from

AEP and, after AEP raised its price to 60 mills/kwh, sought

another source for the next hour. Consumers Power Company

and Detroit Edison Company both offered non-displacement

power at 40 mills. AEP refused to transmit, saying it had a

600 MW unit out and could not resell power from another

source. 2/ Columbus cancelled the transaction and had to

buy 10 MW of power from AEP at 100 mills/kwh. Ex. AMPO-1 at

7-8.

5. In July 1993, two AMP-Ohio members (Columbus and

St. Mary's) had been buying hourly non-displacement power

from AEP when the price rose to 35 mills. Dayton Power &

Light Company (DP&L) offered to sell at 23 mills and AEP

agreed to transmit for one hour. But for the next hour, AEP

said it had problems with its system, refused to transmit

the power, kept the power from DP&L for itself and offered

to sell power to AMP-Ohio for Columbus and St. Mary's at 100
=20

2/ AEP generally limited its offer of short-term transmission
to buy/sell transactions; that is, AEP would buy the power
from the seller and resell it to the purchaser.=20
Supplemental testimony of AEP Witness Baker (Ex. A-73) at
27-29. Often, the terms of the buy/sell transaction
required transmission dependent utilities (TDUs) to maintain
reserves and meet contractual commitments for at least a
year. Id. =20
=0F,

- 4 -

mills. Columbus increased its local generation, but St.

Mary's purchased 8 MW at 100 mills. For the next hour, AMP-

Ohio arranged with DP&L for another 8 MW, hoping AEP would

transmit under the 24 hour buy-sell agreement. AEP did

transmit this power. Seven hours later in the day, St.

Mary's Greenup Hydro project power was available and the 8

MW from DP&L was no longer needed. If St. Mary's had been

receiving the hourly power that AEP had refused to transmit,

St. Mary's could have switched to Greenup power. But

because AMP-Ohio had changed to daily service, St. Mary's

had to pay a demand charge for the entire day, even though

it used the power only 7 hours and would have paid less

under the hourly rate. Ex. AMPO-1 at 8-9.=20

6. In January 1994, AMP-Ohio sought to transfer power

from one member with generation to other members, which

required transmission over AEP and Toledo Edison lines.=20

Toledo Edison said yes, AEP said no. AMP-Ohio's northern

members purchased emergency power from Toledo Edison. AMP-

Ohio then reminded AEP that it had agreed not to deny

transmission and AEP agreed to transmit. Ex. AMPO-1 at 9. =
=20

7. IMPA arranged to buy 80 MW of short-term power from

LG&E and have it wheeled, using buy-sell arrangements,

through Public Service Company of Indiana (PSI) and AEP to

serve IMPA's load at Richmond (an IMPA member). The

delivered price was $.292 per kW-day plus a 1 mill adder.=20

At the same time AEP arranged to buy 300 MW from PSI at $.30
=0F,

- 5 -

per kW day plus out-of-pocket energy costs. Hence, PSI was

shipping a total of 380 MW to AEP with 80 MW of that amount

to be delivered to IMPA's load at Richmond. Then, on a day

when IMPA should have received the 80 MW, AEP told IMPA that

PSI had sold everything to AEP and that IMPA would have to

buy from AEP at $.63 per kW day plus the cost of energy from

AEP. IMPA purchased from AEP under protest. AEP used its

control over transmission to intercept the 80 MW at a lower

price and resell it as short-term power to IMPA. AEP

claimed that PSI had terminated its sales to AEP on that

day. But the 80 MW was independent of PSI's other sales to

AEP and would not have been interrupted if AEP had not

interrupted it. IMPA-1 at 7.

8. IMPA has combustion turbines owned by and located

at one member, which IMPA would like to connect to the Joint

Transmission System owned by IMPA, CINergy and Wabash Valley

Power Association. To do so, IMPA needed a metering

agreement with AEP, to which AEP would not agree. IMPA-1 at

6.

9. In January 1994, IMPA had power to sell from its

turbines when AEP and others needed power. IMPA offered

power to AEP but AEP it said could not purchase the power

without an existing contract. Moreover, since there was no

short-term tariff, IMPA could not sell the power to another

utility. IMPA-1 at 6. =20

10. Another example of the utility engaging in
=0F,

- 6 -

dilatory tactics that raised the customer's transaction

costs and effectively denied transmission is the "sham

transaction" provision proposed by AEP. As filed, AEP's

tariffs permitted it to deny service merely because a

portion of the transmitted power might be used to serve a

former retail customer of AEP. See, e.g., Ex. BR&WVP-1 (J.

Bertram Solomon testimony, February 23, 1994). (As part of

a settlement AEP filed the pro forma tariff and withdrew

this provision.)=20

11. Finally, AEP's originally filed tariff contained a

"prodigal customer" provision. Under this provision,

transmission customers who sought to convert back to

requirements service had to give AEP five years' notice, in

which case AEP and the customer would enter into

negotiations to determine whether AEP will provide service

at all and if so under what rate, terms, and conditions.=20

Ex. S-39 at 1 (Staff testimony). AEP did not require notice

from all new customers, only from prodigal customers. Id.

at 2. That a potential customer was previously served by

AEP is not a reason to treat the customer differently. (AEP

withdrew this provision when it filed the pro forma tariff.)

B. Entergy Services, Inc. (Entergy)=20

Entergy filed a partial settlement largely adopting the NOPR

pro forma tariffs except for two provisions (headroom and

ancillary services). Because the settlement predated the filing

date for customer testimony before the ALJ, the customers did not
=0F,

- 7 -

address the need for Entergy to file a tariff. However,

customers did make allegations of discriminatory practices, as

follows. =20

1. Customers alleged that Entergy flat-out refused to

wheel. Louisiana Energy and Power Authority (LEPA) witness

Sylvan J. Richard testified that LEPA's predecessor systems

could not obtain interconnections from Entergy. Ex. SJR-1

at 50.

2. Customers also alleged that Entergy refused to

provide service priority equal to native load and refused to

provide service flexibility equivalent to the utility's own

use. For example, LEPA witness Richard testified that even

after state commissions ordered interconnections and other

coordination services, LEPA's predecessors were still not

able to obtain coordination services because Entergy was not

willing to coordinate and because the transmission service

it did offer was inflexible, unidirectional point-to-point

service, which prevented economic coordination with others.=
=20

Id. at 50-51. =20

3. South Mississippi Electric Power Association

(SMEPA) witness J. Bertram Solomon testified that Entergy's

original "open access" tariff was restricted to point-to-

point service, proposed separate charges for each operating

company, and required the cancellation of existing

agreements in order to take service under the proposed

tariff. Ex. SMEPA-10 at 28. Entergy eventually filed a
=0F,

- 8 -

network tariff, but proposed different local facilities

charges for the various Entergy public utility operating

subsidiaries. Id. at 29. Since these local facilities

charges were higher than the transmission component of the

subsidiaries' bundled rates, Entergy obtained a competitive

advantage. Id.

4. The Arkansas Cities and Cooperatives (ACC) is a

group of cities and cooperatives that own or operate

electric generation or distribution systems in Arkansas.=20

ACC Witness Steven Merchant testified that Entergy has

segregated the wholesale market between two of its

subsidiaries, Arkansas Power & Light Copmpany (APL) and

Entergy Power, Inc. (EPI). Ex. SMM-1 at 16. In marketing

power and energy in Arkansas, EPI is subject to an Arkansas

Commission order that bars EPI from competing with APL for

wholesale loads without first obtaining a waiver. Id.=20

Recently, EPI requested this waiver for all wholesale

transactions in Arkansas except for wholesale customers

currently served by an Entergy subsidiary; in other words,

EPI requested the Arkansas Commission to expand competition

for all wholesale customers except where EPI might compete

with APL. Id. ACC witness Merchant concluded that, since

EPI does not compete with APL, Entergy insulates APL's

wholesale business from competition and denies those

wholesale customers access to EPI as a source of power,

thereby limiting alternative generation sources available to
=0F,

- 9 -

ACC. Id. at 17-19. (Entergy's witness Kenney stated that

Entergy has recently filed a joint motion with ACC to the

Arkansas Commission seeking to extend the waiver and permit

EPI to sell to APL's wholesale customers. Ex. JFK-11 at 14-

15.)

C. Pacific Gas & Electric Company (PG&E)

Northern California Power Agency (NCPA) attached several

documents to its 1988 complaint in Docket No. EL89-4. These

documents were provided to support NCPA's claim that PG&E's

unreasonable practices under the PG&E/NCPA Interconnection

Agreement (IA) effectively denied NCPA access to transmission

properly requested under the IA. Although the parties eventually

settled and the Commission terminated the docket with a letter

order dated May 18, 1988, these documents provide allegations of

PG&E using dilatory tactics that so protracted negotiations as to

effectively equal a refusal to wheel. 3/ =20

1. PG&E stated that since transmission was not

currently available, it was entitled to wait 72 months

before providing transmission; that is, transmission access

could not be granted before the passing of the 72-month

notice period. NCPA 1988 Complaint, Ex. 3. However, the IA
=20

3/ All of these incidents are related to and examples of PG&E's
conduct described in the NOPR (FERC Stats. & Regs. =0F4 32,5=
14
at 33,073 n.151), that is, the history of PG&E's attempt to
avoid its commitments made to the California owners of the
California Oregon Transmission Project (COTP). However,
these incidents are not exactly the same as the incidents
described in the NOPR, because NCPA is not one of the owners
of the COTP.
=0F,

- 10 -

provided that transmission be provided when it becomes

actually available. PG&E also requested substantial

additional information, which NCPA considered beyond that

reasonably necessary for a study, but still provided. PG&E

then determined that transmission was not available,

reasoning that transmission was unavailable unless all the

transmission requested could be provided 8760 hours per year

without restrictions or limitations, extending through the

expiration of the agreement in 2013. NCPA 1988 Complaint at

9. =20

2. On November 27, 1987, NCPA made a new transmission

request to PG&E, seeking 50 MW of bi-directional

transmission at Midway. NCPA 1988 Complaint, Ex. 5. On

January 28, 1988, PG&E filed an interconnection agreement

with Turlock Irrigation District (TID) that provided TID

with 50 MW of bi-directional transmission at Midway.=20

Pacific Gas & Electric Company, 42 FERC =0F4 61,406, order o=
n

reh'g, 43 FERC =0F4 61,403 (1988). On February 22, 1988, PG=
&E

advised NCPA that all firm transmission service available at

Midway had been fully subscribed. NCPA 1988 Complaint, Ex.

6. Then, on March 29, 1988, PG&E filed with the Commission

an interconnection agreement with Modesto Irrigation

District (MID), that provided MID with 50 MW of bi-

directional transmission at Midway. Pacific Gas & Electric

Company, 44 FERC =0F4 61,010 (1988). At about the same time

(in the last week in March 1988), PG&E advised NCPA that the
=0F,

- 11 -

allocations of transmission to TID, MID, and others,

including a not yet finalized allocation to Sacramento

Municipality Utility District, had used all the transmission

available at Midway. NCPA 1988 Complaint, Exs. 7 and 8. =
=20

D. Northeast Utilities Service Company (NU)

This is the case where Northeast Utilities acquired Public

Service of New Hampshire (PSNH) (Docket No. EC90-10). New

England Power Company (NEP) witness Robert Bigelow's direct

testimony expressed concern over the "relatively restrictive

transmission policies of both" NU, on behalf of Northeast

Utilities' public utility subsidiaries, and PSNH. Bigelow Direct

Testimony at 21 (filed May 25, 1990). In his cross rebuttal

testimony, Mr. Bigelow testified that "NU has a poor track record

as a provider of transmission service" and "PSNH also has an

abhorrent track record as a provider of transmission services."=
=20

Bigelow Cross Rebuttal Testimony, at 3 (filed June 20, 1990).=20

Mr. Bigelow described both NU's and NEP's (his own company)

failure to provide service flexibility equivalent to their own

use. Except for NEP's TDUs, both NEP and NU historically

provided only point-to-point transmission, which required

separate scheduling for each transaction. Bigelow Cross Rebuttal

at 4.

E. Southern California Edison Company and San Diego Gas and
Electric Company

The evidence in this merger proceeding (Docket No. EC89-5)

included testimony from a number of witnesses describing
=0F,

- 12 -

instances of Edison's conduct. Richard Greenwalt was the power

supply supervisor for the City of Riverside, California. He was

responsible for scheduling all purchases of energy for Riverside

and for the cities of Azusa, Banning and Colton, California.=20

Greenwalt testimony at 1 (November 1989). (These four cities and

Anaheim, California, are collectively referred to as the Southern

Cities or Cities.) Joseph Hsu was the Director of Utilities for

Azusa. Hsu testimony at 1 (November 1989). Gale Drews was the

electric utility director of Colton. Drews testimony at 1-2

(November 1989). Bill Carnahan was the director for Riverside.=
=20

Carnahan testimony at 1 (November 1989). Gordon Hoyt was the

general manager of the Anaheim power department. Hoyt testimony

at 1 (November 1989). Dan McCann was the power coordination

supervisor for Anaheim. He supervised Anaheim's load scheduling

and is a former Edison employee, having worked for Edison for 20

years. McCann Testimony at 1-2 (November 1989). These witnesses

testified that Edison refused to wheel as follows.

1. Edison's policy was to curtail the Cities any time

it could be justified using any of a list of acceptable

reasons to deny interruptible transmission service. Id. at

22-23.=20

2. Edison would not generally provide transmission

service when Edison could save money by itself purchasing

the economy energy that would be wheeled. McCann testimony

at 19. The Cities called Edison every hour to request

interruptible transmission service. Id.. Edison often
=0F,

- 13 -

refused to sell energy available in the Western Systems

Power Pool to the Cities and then made available higher cost

contract energy or partial requirements service. Id. at 19-

20. =20

3. When Anaheim requested Edison provide firm

transmission of power from neighboring states, Edison would

often agree to provide non-firm service but would not

integrate the capacity for many years in the future, saying

that its control area did not need capacity at that time.=20

Hoyt testimony at 9. Since the selling utility was

interested in a sale of capacity, not just energy, the

transaction would not occur. Id. Edison repeatedly used

its control over transmission to deny Anaheim access to low-

cost firm power. Id. at 9-10. =20

4. While Edison provided short-term firm transmission

service to the Cities, it would only provide long-term firm

service for three specific resources: the SONGS nuclear

plant, a specific IPP, and Hoover Dam power. Hoyt testimony

at 20. One of Edison's reasons for denying long-term

transmission was that Edison desired to reserve the

transmission for its own future (unspecified) needs. Id. =
=20

5. In the 1970s, Edison refused to allow the Cities

access to the Pacific Intertie. Hoyt testimony at 21; Drews

testimony at 7-8. =20

6. In 1988, Edison refused to provide transmission

service for a Cities power purchase from Public Service
=0F,

- 14 -

Company of New Mexico (PSNM) from Palo Verde Nuclear

station. Hoyt testimony at 21. =20

7. Edison has refused to provide requested firm

transmission from =20

- California-Oregon border to Midway Station

- Nevada-Oregon Border to Sylmar Substation

- Palo Verde Switchyard to Vista=20

- SONGS Switchyard to Vista.

Carnahan testimony at 15. =20

8. Riverside requested transmission from Palo Verde

and was told that such service was not available. Carnahan

testimony at 16. Edison offered Riverside only 12 MW of

curtailable transmission entitlement to provide Riverside's

share of Palo Verde. Id. This service was neither large

enough or long enough, and Edison insisted on

unreasonable terms and conditions. Id.

9. Azusa, Banning and Colton had a contract with

Edison that entitled them to use their Palo Verde firm

transmission path to schedule energy to meet their contract

energy obligation. Edison refused to permit the three

cities to use that path. Edison did not contest that the

contracts allowed this use, but said that the scheduling of

such small amounts of energy for the three cities would be

too burdensome. Greenwalt testimony at 14.=20

10. Edison would not respond in a timely manner to the

Cities' requests, routinely taking months to respond. Drews
=0F,

- 15 -

testimony at 15.

11. During the 1980s, Edison provided Colton with some

transmission service to allow the Cities to reach certain

suppliers, but limited the choices available to the Cities

and imposed terms and conditions that increased the Cities'

costs and placed Colton at a disadvantage against Edison.=20

Drews testimony at 9. Arranging alternative generation

sources was difficult because the Cities always had to first

get Edison to state whether it would provide transmission.=
=20

12. During 1988 and 1989, a dispute arose between

Edison and the Cities concerning the Hoover Uprating

Project. Drews testimony at 16. Edison argued that for the

months when units were out of service for uprating, and

Southern Cities capacity was reduced to zero, Southern

Cities would not receive an energy credit, even though

energy was still available and used by Edison. But the

contracts allowed a participant who did not have capacity to

still schedule its energy as non-firm energy on the capacity

of another participant. Id. at 16-17.

13. In 1986, Azusa negotiated a power purchase

contract with the California Department of Water Resources

in increments of first 5 MW and then 2 MW (for a total of 7

MW). Hsu testimony at 14. First Edison assured Azusa that

the transmission for the additional 2 MW would not be a

problem. Id. Then Edison would not agree to amend the

transmission service agreement for the additional 2 MW. Id.
=0F,

- 16 -

14. In 1986, Azusa notified Edison of Special

Condition 12 4/ purchases from PG&E and requested firm

transmission service. Id. Two months before service was to

begin, Edison notified the Cities of a problem with the

transmission lines. Id. Transmission was eventually

granted, but only after a four-month delay and substantial

losses to the Cities. Id. Then Edison decided there was no

problem with its transmission facilities. Id. at 14-15.

15. In 1986-87, the Cities purchased 20 MW from PG&E

and 80 MW from Deseret G&T Cooperative. Hoyt testimony at

7-8. Edison stated that without reinforcement of its

transmission system, Edison would not provide the

transmission. Id. There was a five-month delay during

which the Cities were forced to purchase from Edison at a

higher cost. Id. at 8-9. Then Edison decided that the

transmission system did not need reinforcement. Id. at 8.

16. Edison also refused to provide a service priority

equal to that of native load. It would curtail the Cities

in order to purchase more economy energy for itself. McCann

testimony at 28. If Edison could make the purchase, it

would curtail the City and use the energy for itself. Id.=
=20

When Edison curtailed the Cities, they were not able to

=20

4/ Special Condition 12 of the Integrated Operations Agreement
between Edison and the Southern Cities defined certain
Special Condition 12 resources and allowed the Cities to
make certain uses of those resources, subject to certain
restrictions.=20
=0F,

- 17 -

purchase economy energy and instead purchased energy from

Edison. Id. at 24.

17. According to Edison, the interruptible

transmission it provided the Cities was interruptible for

any reason. Id. at 20. A purchase could be terminated the

hour after it is begun or even during the hour. Id. As a

result, the Cities lost opportunities to make advantageous

economy purchases. Id. at 20-21. =20

18. Edison also refused to provide customers

flexibility similar to the flexibility Edison provided

itself. Edison's refusal to provide bi-directional

transmission service restricted the Cities' abilities to

purchase hydroelectric energy from the Pacific Northwest.=20

Hoyt testimony at 22. Because most contracts with Northwest

utilities require a return of power, the Northwest utilities

would not deal with the Cities without transmission to

return energy. Id. at 22-23. Edison did provide bi-

directional transmission to the Los Angeles Department of

Water & Power (LADWP) to accommodate flows to and from

Arizona. Id.

19. Riverside was unable to obtain non-firm service

more than two hours in advance of need. Carnahan testimony

at 18.

20. Riverside and Colton were both served out of

Edison's Vista substation. Although the two cities were on

the same 69 kV bus, Edison would not allow them to sell
=0F,

- 18 -

energy to each other. Greenwalt testimony at 17.=20

21. Riverside's agreement with Edison allowed

Riverside to purchase a block of energy through the WSPP and

divide it up among the four Cities (Azusa, Banning, Colton

and Riverside). Greenwalt testimony at 17. When Riverside

had excess energy from other sources, Edison would not

permit it to sell that energy to the other three cities.=20

Id. For example, Riverside attempted to sell Deseret energy

transmitted by LADWP to the Edison system. Id. at 17-18.=20

LADWP would not break out the Cities' shares of that energy,

and Edison would not accept the energy as a delivery for all

four cities. Id. at 18. Edison argued that because this

energy was excess energy that Riverside could not use,

Riverside did not have transmission rights to bring it into

the control area. Id. As a result, Riverside paid for the

energy delivered by LADWP to the Edison control area, but

could not sell it to the other three cities, and gave it to

Edison itself, which consumed the energy without making any

payment for it. Id. Riverside tried a number of

alternative paths, including using WSPP transmission where

Riverside paid Edison 5 mills to connect to Azusa, 5 mills

to connect to Banning, and 5 mills to connect to Colton for

each megawatthour. While this approach was successful for a

while, eventually Edison refused to permit these sales. =20

22. Edison claimed that the Cities only have

transmission rights to bring in enough Special Condition 12
=0F,

- 19 -

energy to satisfy the Cities' load. Greenwalt testimony at

18. =20

23. Edison contended that the Cities' load

requirements were satisfied first by integrated resources

and then by Special Condition 12 and economy energy

purchases. Id. at 19. When the Cities' integrated

resources exceeded their load, any Special Condition 12

resources became excess. Under Riverside's Deseret

contract, the Cities were required to take a minimum of 35

MW each hour. Id. Edison acknowledged that it was

obligated to buy, or allow the Cities to sell, any excess

energy from Riverside's integrated resources. Id. However,

Edison refused to give the Cities credit for excess Special

Condition 12 energy brought into the area, claiming that the

Cities could not have brought it in because they did not

have transmission rights. Id. =20

II. Other Examples of Transmission Disputes

Disputes over transmission are not uncommon, contrary to

EEI's suggestion. Some recent examples taken from pleadings and

other documents and from Commission orders reveal that it has

been very difficult for various entities in the electric power

industry to agree on transmission rights. These examples also

reveal that even after issuance of AEP and the Open Access NOPR

with its proposed pro forma tariffs, there has been considerable

controversy over whether various utilities' "open access" tariffs

deviate from those tariffs. (The Commission has allowed
=0F,

- 20 -

utilities that adopt tariffs that match or exceed the non-rate

terms and conditions in the NOPR pro forma tariffs to obtain

certain benefits.)

A. In a letter of February 3, 1995 to Mr. Gerald

Richman of the Commission's Enforcement section in the

Office of the General Counsel, Steven J. Kean, Vice

President, Regulatory Affairs, Enron Power Marketing, Inc.

(Enron) alleged that Niagara Mohawk Power Corporation (NiMo)

refused to wheel power from Rochester Gas & Electric (RG&E)

to Enron under RG&E's transmission contract with NiMo;

however, when Enron revealed the buyer, NiMo did wheel power

for RG&E to the buyer. Mr. Kean alleged that this was not

an isolated incident. NiMo argued that the contract did not

require it to provide RG&E with transmission to Enron. It

also said that the principle of comparability does not

require the service. Letter of November 21, 1994 from NiMo

representative A. Karen Hill to Gerald Richman.

B. The Commission's Task Force Hot Line (Hot

Line) received a complaint that a member of the New

York Power Pool (NYPP) refused to transmit power that

another member bought from a power marketer. In a

letter of November 17, 1994, from Chair Moler to Mr.

William J. Balet, Executive Director of NYPP, Chair

Moler explained that the Commission's enforcement staff

had investigated and found the allegation to be true.
=0F,

- 21 -

C. In Southern Minnesota Municipal Power Agency

v. Northern States Power Company (Minnesota), 73 FERC =0F4

61,350 (1995), NSP and SMMPA had a contract under which

NSP agreed to provide transmission service. However,

the parties had numerous disputes over the service.=20

The Commission found that NSP had misinterpreted the

contract in several ways. For, example, SMMPA argued

that it should be able to directly schedule its

deliveries of energy out of the NSP control area and

that it should not be limited to particular points of

delivery. NSP argued that only it was entitled to

control the physical operation of scheduling. The

Commission found that the clear language of the

contracts gave SMMPA the authority to schedule its own

power. =20

D. Mid-Continent Area Power Pool, 72 FERC =0F4 61,223

(1995), involved MAPP's membership criteria, which made it

impossible for a power marketer to join MAPP and obtain the

benefits of certain transmission services available only to

MAPP members. The Commission found that the membership

criteria may be unreasonable, particularly since there may

be less burdensome ways of setting up membership criteria

for non-traditional entities.

=20
=0F,