FERC Takes a Second Look at the Independent Ownership and Operation of Power Transmission Systems

Hoping to encourage the formation of independent transmission companies ("ITC"), FERC adopted in June a new Policy Statement on the ownership of ITCs. The Policy Statement addresses the types of ownership structures that are eligible for ITC status. The Policy Statement clarifies that FERC will consider ITC proposals from applicants in which market participants have passive minority equity interests, based on FERC's evaluation of certain criteria. Under the Policy Statement, FERC will consider proposals involving passive participation of up to 49 percent ownership by a single market...

FERC Proposes Changes to Accounting and Financial Reporting Rules to Gain Further Insight into RTO Operations

Responding to the increasingly controversial issue of escalating RTO and ISO operating costs, FERC has proposed a new rule that would change its accounting and financial reporting requirements for public utilities, including independent system operators and regional transmission organizations (collectively "RTOs") that file financial reports with FERC. Specifically, FERC is seeking more detailed information about regional transmission and RTO market operation assets, RTO revenues, and other market-related expenses. FERC states it is proposing the rulemaking to accommodate the industry...

FERC Administrative Law Judge Issues Initial Decision Largely Adopting ISO-New England Proposal for Locational ICAP

The contentious battle over capacity markets in New England moved a step closer to conclusion when a FERC judge recently upheld for the most part the details of ISO-New England's locational ICAP ("LICAP") proposal. See UPDATE (09/30/2002). LICAP would replace the simpler ICAP regime that allowed load-servers to satisfy their ICAP obligations without regard to whether the capacity was actually deliverable where needed. The judge found that use of LICAP and demand curves for capacity pricing was the only proposed methodology that would appropriately compensate generators needed for reliability...

Sempra Tries For a 'Hail Mary' to Keep Jury From Hearing State Antitrust Suit

On June 22, 2005, Sempra Energy and its utility subsidiaries, Southern California Gas Company and San Diego Gas & Electric Company (collectively "Sempra"), petitioned FERC for an order declaring that the claims made in an antitrust lawsuit pending in state court in San Diego impermissibly intrude upon FERC's jurisdiction. A FERC decision due on the petition is anticipated on the eve of trial and as a consequence may undercut the claims in the massive litigation stemming from the western power crisis of 2000-2001. The litigation under California state antitrust and unfair competition laws...

Ohio Governor Statements Harbinger Possible Electric Industry Re-regulation

Storms of re-regulation in the Buckeye state appear to be building as Ohio Governor Bob Taft (R) hinted in a speech delivered at the NAE Regional Conference held on June 3 in Cleveland that unless competition in the electric industry registers a pulse, re-regulation could be in the state's future. De-regulation in Ohio began in 1999 when S.B. 3, the Electric Restructuring Bill was passed providing customer choice effective January 1, 2001. The results of de-regulation have been mixed; local government aggregation programs, primarily in Northern Ohio where FirstEnergy operates, have won some...

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