The Federal Energy Regulatory Commission on Wednesday sought to provide guidance to the power industry on the formation of an organization to develop wholesale electric industry business practice and communications standards. Although the Commission is giving industry first crack at developing such an organization, FERC made it clear that if the electricity sector does not step up to the plate — and quickly — the agency will either select an organization itself or set up a procedure to develop the standards.
Detailing an order issued at FERC’s latest agenda meeting, a Commission staffer noted that once the Commission’s market design principles have been developed, business practice and communications standards will be needed “as soon as possible” to support competition in wholesale electric markets.
Chairman Pat Wood issued a call for the industry to send its smartest, most creative and innovative people to participate in the collaborative standards-making process. “Sending the suits and the mouthpieces is not what this is about. We’re recruiting the smartest people, particularly those who can think outside the box and focus on what will be good for this market 10 years from now. We want people who think above their own narrow self-interest — people who think of the public interest.”
Both the North American Energy Standards Board (NAESB) and the North American Electric Reliability Council (NERC) have made proposals for an organization to develop these standards (see Power Market Today, Dec. 10). The NAESB is the successor to the Gas Industry Standards Board.
To ensure that the standards can be developed in a timely manner, FERC is asking that the industry agree on a single, consensus, industry-wide organization to develop these standards by March 15, 2002. If the industry does not agree on a single organization by that date, FERC will either choose an organization or institute a procedure to develop the standards.
Commissioner Nora Brownell urged that the process go forward. “Let’s get this done. The important work is before us. I can’t believe we’re debating the who.” The reference was to the battle that has broken out between the former Gas Industry Standards Board, now NAESB, and more recently NERC to be the standards-setting organization. Some questions have been raised as to how an organization like NERC which focuses on system reliability, which necessarily requires a degree of secrecy, can combine that function with standards-setting, which invites wide participation.
“This is a good order,” FERC Commissioner William Massey said at the Commission’s last agenda meeting of 2001. “It essentially says to the industry we want a single organization that accomplishes this goal of standardizing business practices and standardizing communication protocols,” he added. “It says to the industry, work this out and come back to us with a recommendation and that’s a good approach and it has my full support.”
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