FERC yesterday took the first step towards developing a largeregional transmission organization (RTO) in the southeasternsection of the nation.

The Commission granted RTO status to GridSouth, which currentlyincludes only four utilities in two states, but it ordered theGridSouth members to begin discussions with other companies in theregion – such as the Southern Companies and Santee Cooper – tocreate a much larger RTO in the Southeast [RT01-74].

In a separate yet related order, FERC rejected the SouthernCompanies request for a declaratory order to form its own RTO, anddirected it to consider joining a neighboring RTO in the region -such as GridSouth [RT01-77]. Southern “should take seriously oursuggestion,” said Commissioner Linda Breathitt.

The scope and configuration of GridSouth are “not ideal,” butthe RTO represents a “good first step” towards creating a largerRTO in the Southeast, she noted. The order emphasizes thatGridSouth must continue to expand in the region by attracting newmembers. Its current members include Carolina Power & Light,Duke Energy Corp., South Carolina Electric & Gas, and GridSouthTransco LLC.

Commissioner William Massey said he would have preferred thatFERC withheld grid status from GridSouth as well, and orderedGridSouth and Southern to participate in a settlement conference toform a single RTO for the Southeast.

Chairman Curt Hebert said he envisions GridSouth as “perhaps ananchor [RTO] for the Southeast.” He further noted that hewill”expect and insist” that future meetings between GridSouth andSouthern be held in “good faith” with the intention of creating alarge Southeast RTO.

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