FERC last Tuesday rejected a petition filed by Southern California Edison Co. this summer asking the Commission to declare that Edison has no obligation to act as a scheduling coordinator for the Los Angeles Department of Water and Power (LADWP) under an existing exchange agreement between the utility and the LADWP.

Edison and the LADWP entered into an exchange agreement in April 1987 that provides, among other things, for a long-term exchange of transmission rights on the Pacific AC and DC transmission lines and firm transmission service for LADWP between the Palo Verde nuclear power plant and the Sylmar switching station.

Edison, in a July 21 filing, noted that the agreement was hammered out “long before California electric restructuring” and therefore the scheduling and dispatch provisions of the deal were drafted and negotiated at a time when Edison was the control area operator.

When the California Independent System Operator (CAISO) was created, it became the control area operator in the state. CAISO, with FERC approval, developed the concept of scheduling coordinator as part of the new electric industry structure.

But despite the fact that all transmission customers were required to have a scheduling coordinator under the new CAISO regime, LADWP, as well as several other customers that had existing transmission contracts when the restructuring was implemented, had not procured a scheduling coordinator prior to the inception of the ISO.

Edison served as scheduling coordinator for several customers, including LADWP, for approximately three years without charge. After this transition period, the utility notified LADWP that it would no longer act as LADWP’s scheduling coordinator because it wasn’t obligated to perform that service under the exchange agreement.

In response, LADWP said that it would not assume the scheduling coordinator duties, would not pay Edison for the costs associated with the utility’s performing the scheduling coordinator duties and that it would “sue for breach of contract for millions of dollars in damages” if Edison failed to perform its alleged duties under the exchange agreement.

“On the merits, we deny SoCal Edison’s petition for declaratory order and decline to declare that SoCal Edison is not obligated to serve as LADWP’s scheduling coordinator under the exchange agreement,” FERC said in its Dec. 9 order.

FERC noted that the utility and CAISO entered into a “Responsible Participating Transmission Owner Agreement” (RPTOA) in order to, among other things, implement provisions of the ISO tariff as they relate to existing contracts that provide the terms by which a responsible participating transmission owner will act as a scheduling coordinator.

CAISO informed SoCal Edison that it would not agree to the utility’s discontinuance of scheduling service under the RPTOA unless LADWP so agreed. “LADWP has not agreed to SoCal Edison’s proposed discontinuance of scheduling coordinator service, nor has SoCal Edison demonstrated that its continued role as a scheduling coordinator is contrary to the public interest, as long as LADWP remains opposed,” FERC added.

Meanwhile, FERC also addressed another element of Edison’s petition. The utility offered an alternative under which FERC would accept for filing a tariff under which Edison would be allowed to pass through the costs billed by CAISO to Edison in its role as scheduling coordinator for certain transmission customers.

In response, FERC accepted the proposed tariff, effective Dec. 9, subject to refund and subject to rehearing of Opinion 463 and further order in the instant proceeding. Opinion 463 involves the issue of whether a new tariff filed by Pacific Gas & Electric that intended to pass through CAISO grid management charge costs to its existing transmission contract customers is just and reasonable.

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