Companies rush to file FERC Order 2000 applications
In a flurry of filings, transmission-owning companies submitted applications Monday to the Federal Energy Regulatory Commission (FERC) to sell or transfer control of their transmission assets to parties that meet the requirements of FERC Order 2000. Order 2000 generally required all investor-owned electric utilities subject to FERC regulation to file a proposal on how they would create or join an RTO, or describe any barriers to joining or forming such a group.
In a flurry of filings, transmission-owning companies submitted applications Monday to the Federal Energy Regulatory Commission (FERC) to sell or transfer control of their transmission assets to parties that meet the requirements of FERC Order 2000.
Order 2000 generally required all investor-owned electric utilities subject to FERC regulation to file a proposal on how they would create or join an RTO, or describe any barriers to joining or forming such a group by Monday. The proposed RTOs are expected to begin operation by Dec. 15, 2001. (OGJ Online, September 20, 2000)
DPL Inc. said it has filed to join the Alliance Regional Transmission Organization (RTO). Under the Alliance RTO, DPL's regulated utility, Dayton Power & Light Co. (DP&L), will continue to own its transmission assets. Operation and control of the transmission assets will be turned over to the Alliance when it becomes operational.
Other members include American Electric Power Co. Inc.; Consumers Energy, a unit of CMS Energy Corp.; Detroit Edison Co.; FirstEnergy Corp.; and Dominion Resources Inc.'s Virginia Power subsidiary. In total, Alliance members own more than 45,000 miles of transmission lines serving 28 million customers in a nine state region.
"The Alliance RTO is the best option for our shareholders and customers," said DPL CEO Allen Hill.
Tampa Electric Co., a unit of TECO Energy Inc.; along with Florida Power & Light Co., a unit of FLP Group Inc.; and Florida Power Corp., said they filed an application to create a RTO to serve Florida. The RTO will be known as GridFlorida LLC. The three utilities represent almost 80% of the aggregate net energy load in the region.
"FPL favors the transmission company form of an RTO for peninsular Florida because it uses a traditional for-profit business model which aligns the interests of customers, management and shareholders," said FPL Pres. Paul Evanson. He explained a transco has the incentive to be cost efficient, to expand transmission facilities, and to provide reliable service. It also provides an effective means to raise capital for construction of new transmission assets, he said.
GridFlorida LLC proposed
As proposed, GridFlorida LLC would control the transmission assets of the three utilities, as well as other utilities in the region that choose to join, the companies said. Tampa Electric said the plan was the result of a 10-month collaborative process among the three filing utilities and other stakeholders, including Florida municipal and cooperative utilities, independent power developers, power marketers, and the Florida Public Service Commission.
Final details of the transco will be filed with the FERC Dec. 15.
"Our proposal for a transco, coupled with our efforts to increase our power reserve margin from 15% to 20%, will further ensure that the people of Florida do not encounter the high rates and power shortages faced by people in California and other states that have adopted other approaches," Evanson said.
Six western utilities reported taking an additional step to form an independent transmission company, TransConnect, which would serve six states. TransConnect will be a member of the planned regional transmission organization, RTO West.
TransConnect, a for-profit company, will own or lease the high voltage transmission facilities currently held by Avista Corp., Montana Power Co., Portland General Electric Co., Puget Sound Energy Corp., Nevada Power Co., and Sierra Pacific Power. If a final proposal emerges, it must be approved by FERC, the boards of directors of the filing companies, and state regulators, the companies said.
The companies currently have extensive transmission facilities in Oregon, Washington, Nevada, and Montana, and in parts of Idaho and California. Those facilities are within the proposed territory for RTO West, which would be the single provider of transmission services, and controller of transmission operations, in an eight-state region. The filing asks FERC for a ruling that TransConnect, as proposed, passes FERC's independence and passive ownership tests.
Entergy partners with SPP
Entergy Corp. said it will seek approval of the transfer of its transmission assets to an independent transmission company or transco and has also asked FERC to approve a partnership with the Southwest Power Pool to form an RTO.
Under the proposed partnership, the transco will operate under the oversight of, and within, the SPP's RTO, Entergy said. SPP is a regional reliability council that provides security coordination and tariff administration across all or parts of eight southwestern states. SPP is also filing an application with FERC seeking recognition as an RTO.
Under the proposal, Entergy said its operating companies will transfer their transmission assets to the transco in exchange for passive ownership interest.
The Entergy transmission system includes more than 15,000 miles of transmission lines extending from the southeastern portion of Missouri to southern Louisiana and includes the western portion of Mississippi and southeastern portion of Texas.
CP&L Energy, Duke Energy Corp., and SCANA Corp. said they will filed a joint request to establish the previously proposed GridSouth Transco LLC as a RTO. The companies said GridSouth is expected to become a for- profit, investor-owned transmission company independent of the three founding companies.
Together, the three utilities operate more than 22,000 miles of transmission line and approximately 34,500 Mw of electric generation.