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Wood Plans to Open Inquiry into Order 888 Before Departing Agency

FERC Chairman Pat Wood signaled last Wednesday that the agency will kick off an inquiry into whether the sweeping 1996 electricity deregulation rule, Order 888, needs to be revised or updated to shield against transmission-access discrimination, according to published reports.

The notice of inquiry (NOI) will ask the power industry to comment on changes that are needed to Order 888, which opened the monopoly-dominated power industry to competition for the first time. It will be similar to Order 637 on the natural gas side, which addressed second-generation issues that arose following the landmark gas restructuring order, Order 636.

This does not come as a surprise to the electric industry, an industry source said. "Industry has been talking about this for a long time, but the actual procedure [to bring about changes to Order 888] was not clear," she noted.

What is unexpected is that Wood plans to open the inquiry before he departs the Commission on June 30, she said "All along this has been [Commissioner Joseph] Kelliher's baby. It's not Wood's thing."

Despite the issuance of Order 888, there "still are circumstances of discriminatory behavior" with respect to transmission access, according to the source. "RTOs solve some of the problems. But you won't see RTOs in certain parts of the country anytime soon, if ever," she said, adding that the NOI will be an alternate way of making some of the fixes to Order 888.

"The NOI is a baby step," coming before a notice of proposed rulemaking and a final rule. She estimated it would be a year and half before any real changes are made to the electric restructuring order.

As for who will succeed Wood, the source said she was not entirely convinced that the White House has settled on Rebecca Klein, a former commissioner and chairman of the Texas Public Utility Commission. "I don't think anyone is in the bag until the White House has [publicly] issued the nomination."

The "most substantive rumors" in Washington, DC have Klein and Kelliher as the front runners for chairman, she said. The more "fascinating" question, is who will be named acting chairman until the Senate confirms the new chairman. She believes "if Kelliher doesn't get the permanent job, the White House might go with [Commissioner Nora Brownell] for acting."

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