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Enron Mail |
FYI.
---------------------- Forwarded by Christi L Nicolay/HOU/ECT on 04/10/2000 02:32 PM --------------------------- From: Christi L Nicolay 04/10/2000 02:31 PM To: Cynthia Sandherr/Corp/Enron@Enron cc: Subject: NOPR Comments This is an excerpt from FERC's Notice of Proposed Rulemaking on RTOs (eventually became Rule 2000). It references the 3/98 petition that Enron, etal filed at FERC (which includes examples). I forwarded you the 3/98 petition last week for you to send to Miriam Erickson. I thought she may be interested in this. ---------------------- Forwarded by Christi L Nicolay/HOU/ECT on 04/10/2000 02:28 PM --------------------------- Linda L Lawrence@EES 04/10/2000 02:26 PM To: Christi L Nicolay/HOU/ECT@ECT cc: Subject: NOPR Comments Docket No. RM99-2-000 - 72 - In March 1998, a group referring to themselves as power industry stakeholders 113/ filed a petition for rulemaking on electric power industry structure. 114/ Although we are not addressing here the specific relief they are requesting in that Petition, the Petition does contain a number of fairly specific allegations indicating problems in the market. For example, the Petition asserts: Concepts such as ATC and the OASIS have become vehicles for obstructing and curtailing, rather than accommodating, transactions. Incumbents are able to deny new entrants access to critical, accurate information across control areas. This can take the form of out-of-date or incorrect postings of ATC or, in some instances, intentional withholding of actual ATC. Regardless of the cause, more transmission capability 111/ Open Access Same Time Information Technical Conference, Docket No. RM95-9-003 (July 18, 1997), transcript at 23. 112/ Id. at 28. 113/ The group consists of a number of power marketers and users, including, for example, Coalition for a Competitive Electric Market, ELCON, Electric Clearinghouse, Inc., and Enron Power Marketing, Inc. 114/ Petition for a Rulemaking on Electric Power Industry Structure and Commercial Practices and Motion to Clarify or Reconsider Certain Open-Access Commercial Practices, Docket No. RM98-5-000. Docket No. RM99-2-000 - 73 - is physically available than is being released for sale. [115/] The Petition alleges the existence of "ATC exclusions, inaccuracies and misuses that deny new entrants the ability to evaluate market opportunities, and therefore, prevent reasonable access to the grid." 116/ The Petition cited specific instances of inconsistent ATC calculations for the same interconnection by the systems on either side; an OASIS showing ATC that was not in fact made available for scheduling; and an OASIS showing no ATC but the utility then using that path for a sale. 117/ EPSA, the trade association representing certain power suppliers, filed comments in support of the Petition and echoed many of the same experiences: EPSA agrees that this discriminatory conduct persists principally because of the continuing incentives and opportunity for transmission owning public utilities covertly to discriminate against other transmission customers, by, for example, minimizing reported available transmission capability (ATC), delaying or inaccurately posting ATC on the OASIS, or otherwise manipulating market operations. 118/ EPSA further stated that, "The manipulation of ATC -- whether with the intent to deceive or as the result of poor OASIS 115/ Petition at 7-8. 116/ Id. at 15. 117/ Id. at Appendix D. 118/ EPSA Comments, Docket No. RM98-5-000, at 2 (filed September 21, 1998). Docket No. RM99-2-000 - 74 - management -- is a serious entrance barrier for competitive power suppliers." 119/ At our regional ISO conference in New Orleans, we were told by a representative from the Public Service Commission of Yazoo City, Mississippi, of a specific instance of what it considered to be discriminatory treatment: Yazoo City, as a participant, has experienced first hand an individual [transmission] owner's continued ability to use its ownership and control [of] transmission to disadvantage competitors, notwithstanding Order 888's mandate of non-discriminatory transmission access. The representative then went on to describe an instance where a marketer could not complete a 10 MW power sale because of transmission restrictions, but then the transmission provider offered to supply the capacity itself. 120/ The representative concluded that Orders Nos. 888 and 889 have not fully eliminated undue discrimination and this will not be achieved "as long as transmission owners are allowed to fence in transmission-dependent utilities and others located on their transmission system to enhance the value of their generation assets at increased cost to competitors." 119/ Id. at 8. 120/ Comments of Robert D. Priest on behalf of the Public Service Commission of Yazoo City, Regional ISO Conference (New Orleans), Transcript at 201-03. After hearing this assertion, Entergy Services, Inc. filed a letter in which it stated that it was unable to identify any Entergy-imposed restrictions that would have prevented the power purchase. See Letter in Docket No. PL98-5-000 (filed July 2, 1998). Docket No. RM99-2-000 - 75 - One specific area where there have been allegations that transmission owners are using ATC to favor their own merchant operations concerns the calculation and use of Capacity Benefit Margin (CBM). Although there is no single accepted definition, CBM is generally used to mean an amount of transmission transfer capability reserved by load serving entities to ensure access to generation from interconnected systems to meet their generation reliability requirements. 121/ Some utilities subtract CBM from their total transmission capability to arrive at ATC. There is no uniform method for calculating CBM. The ability to withhold CBM to ensure reliability not only confers a reliability advantage for the transmission provider, but may give the transmission provider the opportunity to selectively withhold ATC over paths and interconnections useful to its generation competitors. The use of CBM is an issue that is currently being considered in several cases pending before the Commission. 122/ For example, with respect to the formation of the PJM ISO, the Commission noted that it was not demonstrated that the PJM Pool's historical practice of withholding firm transmission interface capacity as a substitute for installed generating reserves is 121/ NERC, Available Transfer Capability Definitions and Determinations (June 1996), at 14. 122/ The Commission recently noticed a technical conference, to be held May 20 and 21, 1999, on the issue of CBM. See Capacity Benefit Margin in Computing Available Transmission Capacity, Notice of Technical Conference, Docket No. EL99- 46-000. Docket No. RM99-2-000 - 76 - consistent with our open access policies. The Commission observed that the load serving entities that own generating capacity within the PJM control area appeared to benefit from this practice as suppliers in addition to benefitting as load serving entities. 123/ The Commission set the issue for further briefing and it remains pending. In another pending proceeding concerning WPSC's CBM calculation, two of the parties assert that CBM "removes firm transmission capacity from open access offerings, thereby raising an unnecessary and unjustifiable barrier to competition," and "fosters discrimination by giving merchant functions gatekeeping control over CBM-related transmission access and by giving individual interface transmission owners broad discretion over where and how much CBM is withdrawn from ATC." 124/ In the same proceeding, Electric Clearinghouse, Inc. asserts that "the CBM set-aside embodies undue discrimination in access to the monopoly owned transmission wires because it ensures certain users a priority over the reserved transmission interface capacity to the exclusion of other firm transmission users." 125/ As we stated above, we fully recognize that these are assertions made in pending cases in which we have not yet made 123/ PJM, 81 FERC at 62,277. 124/ Protest of Madison Gas & Electric Company and Wisconsin Public Power Inc., Docket No. EL98-2-003, at 3 (filed August 21, 1998). 125/ Protest of Electric Clearinghouse, Inc., Docket No. EL98-2- 003, at 3 (filed August 21, 1998). Docket No. RM99-2-000 - 77 - findings. They are referenced here as illustrative of the suspicions in the industry of continuing opportunities for discriminatory treatment that may disadvantage certain competitors where generation owners continue to operate transmission.
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