August 14, 2002—The Federal Energy Regulatory Commission (FERC) recently announced wide-ranging proposals to remedy what it calls “undue discrimination in the use of the interstate transmission system.” The proposals are designed to create wholesale competition, efficient transmission systems, the right pricing signals for investment in transmission, generation facilities and demand reduction, and more customer options.
To achieve these goals, FERC proposes to modify its pro forma transmission tariff to include, among other things, a single flexible transmission service—Network Access Service. This service would apply consistent transmission rules for all customers—wholesale, unbundled retail, and bundled retail—as well as a standard market design for wholesale markets.
The proposals result from what FERC sees as “persistent and costly problems in the nation’s wholesale electric power markets,” including under-investment in needed transmission, generation siting in locations far from customers, unduly discriminatory behavior by transmission providers against independent generators, and fundamental design flaws in certain existing electricity markets.
FERC plans to work closely with the states on all transmission services to customers, over which it proposes to exercise jurisdiction, to achieve non-discriminatory transmission services over the entire interstate grid.
For more information, contact FERC.
