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 facilities.

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 natural gas.

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.

Susan Parker

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