The Federal Energy Regulatory Commission last week voted out twokey companion orders whose objective is to minimize the threat of arepeat of price spikes in the electricity market in the near termand beyond.

It accepted the North American Electric Reliability Council’s(NERC) revised interim transmission loading relief (TLR) proceduresthat are aimed at relieving congestion on transmission systemscaused by parallel flows. The procedures would apply totransmission-operating utilities in the Eastern Interconnection. Italso gave the go-ahead to NERC’s pilot redispatch program for thissummer that relies on counterflow transactions to avoidtransmission constraints.

NERC’s TLR proposal “is not the perfect, comprehensive solutionthat may be attainable some months or years down the road,” but it”improves on” the one that the Commission accepted in a December1998 decision, the order said [EL98-52]. In fact, it is a”significant improvement” over the one initially proposed becauseit “takes the first step of quantifying the native load and networkcustomer flows on constrained facilities.” FERC also agreed thatNERC’s proposal for a redispatch pilot “certainly has itslimitations,” but it added that it was a “meaningful and timelystep in the right direction.” For the most part, the Commissiondenied the requests for rehearing of its December 1998 decision ina separate order [EL98-52-002].

In addition, FERC approved the Mid-America InterconnectedNetwork’s (MAIN) alternative plan for addressing curtailment ofparallel flows, as well as an alternative to NERC’s redispatchproposal that was submitted by the Northeast Power CoordinatingCouncil (NPCC) on behalf of a number of utilities of the New YorkPower Pool. FERC noted that the MAIN proposal was “consistent inmajor essentials” with NERC’s TLR plan, and that the NPCCredispatch proposal – dubbed the Lake Erie Emergency RedispatchProcedure (LEER) – “goes beyond the requirements” of its December1998 order.

FERC directed the Southwest Power Pool (SPP) to comply withNERC’s TLR procedures, but it said the the power pool’s existingredispatch plan was “adequate” since none of the 13 flowgatesidentified as part of NERC’s redispatch pilot are located in SPP’sregion. As for the Pennsylvania-New Jersey-Maryland (PJM) powerpool, the Commission stressed the need for all power pools tosupport the redispatch pilot with respect to external transactions.Concerns were expressed that while PJM’s current congestionmanagement plans were sufficient to address internal constraints,they were inadequate in the external arena. Some have blamed PJM’sfailure to respond to external power demands last summer for thestrength of the Midwestern price spike.

Susan Parker

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