Supreme Court Agrees To Review Order 888
The U.S. Supreme Court last week said it will hear two
challenges to the Federal Energy Regulatory Commission's landmark
Order 888 that kicked off competition in the electric market by
directing utilities to open up their interstate transmission
The high court agreed to review a June 2000 decision by the U.S.
Court of Appeals for the D.C. Circuit, which had upheld the
Commission's groundbreaking ruling that was issued in 1996.
In Order 888, FERC required transmission-owning utilities to
provide transmission service to competing electric providers under
terms that were comparable to those offered to their own customers.
By taking this step, the Commission sought to give customers access
to power providers other than utilities.
The open-access requirement did not apply to all transmission
facilities, however. FERC ordered open access for all transmission
facilities that operated in interstate commerce, but it exempted
transmission that was bundled with retail sales. The latter was the
jurisdiction of the states, it said.
Nine state regulatory commissions challenged the manner in which
the Commission split the baby on what was jurisdictional and
non-jurisdictional transmission. They argued that FERC went too far
in Order 888 and pre-empted state jurisdiction over essentially
intrastate retail transmission.
The nine states were New York, Idaho, Florida, North Carolina,
Washington, Wyoming, Vermont, New Jersey and Virginia.
But Enron Power Marketing Inc., which brought the second
challenge, claimed that FERC hadn't gone far enough in Order 888.
It believes both interstate transmission and retail bundled
transmission should be subject to open access.
The challenges to the open-access rule were seen as inevitable
because the division between the interstate and intrastate
transmission grids is more blurred on the electric side than with
Enron was pleased with the Supreme Court's decision to review
the dispute. "The Supreme Court is right to review FERC rules that
allow monopolies to block transmission lines in any states. FERC
has the obligation to make sure that the transmission of power
between states happens with equal and non-discriminatory access."
The high court will likely rule on the two challenges during its
next term, which begins in October.
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