Speaking at a conference in New York earlier this week,Commissioner Linda K. Breathitt said she believes FERC will have toassume a role in the siting of electric generation and transmissionfacilities to ensure well-functioning competitive power markets.”FERC needs to have a role in the siting of new infrastructurebecause shortages of generation and transmission will not just bestate issues. I believe these shortages could become interstatecommerce issues that must be addressed by the federal government,”she said to the Bank of America Securities LLC gathering.

Commissioner William Massey, the lone FERC supporter of a pricecap on spot power sales in the western region, provided somedetails last week of how he thinks a cap could work. The “price capcould be calculated on a generator-by-generator basis at eachgenerator’s variable operating costs plus a reasonable capacityadder, perhaps in the range of $25/MWh. New generation sourcescould be exempt,” he told a conference of the Energy BarAssociation in Kansas City, MO. “In addition, such a cap shouldhave a well-specified sunset provision, tied either to a datecertain or the attainment of certain conditions, such as somemeasure of adequate reserves.” Massey believes the Commission hasdropped the ball in California. The Commission needs to”aggressively intervene when the markets are not producingreasonable prices,” and it must become the “market police”responding to reports of market-power abuses, he said. “FERC hasyet to demonstrate the political will for these tasks.” As a resultof FERC’s “timidity and hands-off approach,” the state has lost all”trust” in the Commission, and is “headed for a government-runelectricity business for quite a while,” Massey noted.

U.S. District Court Judge Carlos Moreno has postponed until nextTuesday a ruling on whether to enjoin the California Power Exchangefrom billing Enron Corp. and Avista Energy Inc. for the unpaidpower purchases of Southern California Edison and Pacific Gas &Electric (see Daily GPI, Feb. 15).

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