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Enron Asks US FERC To Link Mkt-Based Pwr Rates With RTOs
11/20/2000 Dow Jones Energy Service (Copyright © 2000, Dow Jones & Company, Inc.) WASHINGTON -(Dow Jones)- Enron Power Marketing Inc. is urging federal regulators to withdraw the authority of several electric utilities in the U.S. Southeast to sell power at market rates if they fail to join an approved independent grid-asset operator by Dec. 15, 2001. The Enron Corp. (ENE) power-marketing unit made the suggestion in filings Friday in response to the U.S. Federal Energy Regulatory Commission's December 1999 order encouraging U.S. utilities to turn their high-voltage transmission assets over to independent control of regional transmission organizations, or RTOs. The filing came the same day that FERC Commissioner William Massey told a gathering of energy lawyers that he would seek to ensure that FERC - on a generic, national basis - makes preservation of market-based sales authority by utilities contingent upon their joining an FERC-approved RTO. Enron limited the applicability of its filing to RTO proposals from utilities in the U.S. Southeast: Carolina Power & Light Co. (CPL), Duke Energy Corp. (DUK), Florida Power Corp. (FPC), Florida Power & Light Co. (FPL), South Carolina Electric & Gas Co. (SCG), Southern Co. (SO). Tampa Electric Co. (TE) and the Southwest Power Pool Inc. Absent participation in a FERC-approved RTO, "there is no basis for the commission to assume that a transmission owner has mitigated its transmission market power and ability to discriminate against its transmission-dependent competitors," Enron said in its filing. Enron noted that FERC called for creation of RTOs after determining that its landmark 1996 rules requiring open-access transmission services weren't enough to assure that vertically integrated utilities couldn't control their transmission assets to financial gain in competitive wholesale power markets. "The commission has repeatedly recognized that vertically integrated transmission system owners have an inherent incentive to use their transmission monopolies to discriminate in favor of their own and affiliated power merchant activities," Enron said. The Houston energy giant noted that FERC staff, in a report detailing findings of a national investigation of problems affecting competitive wholesale power markets nationally, found that market participants in the Southeastern U.S. have less confidence than market participants in other regions of the country that their transactions won't be subject to discriminatory practices. "Selling power at market-based (as opposed to cost-based) rates is not a right, but rather a privilege enjoyed by sellers that can demonstrate that they are price takers, unable to exercise market power," Enron said. "Any vertically integrated transmission monopoly that stops short of taking every step that the commission identifies as needed to abate market power and root out discrimination should be denied the privilege of selling power at market-based rates. It simply cannot be trusted not to abuse the privilege," Enron said. -By Bryan Lee, Dow Jones Newswires, 202-862-6647, bryan.lee@dowjones.com Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.
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