With the blustery days of winter not all that far off, FERC chairman Pat Wood last Friday made it clear that he will keep a watchful eye on how energy markets in the Pacific Northwest progress over the coming months, since that part of the country has a winter peaking system bolstered by hydro-electric power and has seen precipitation fall off dramatically.

Wood made his comments in an appearance before a group of reporters at a Washington, DC, presentation sponsored by The Energy Daily and the United States Energy Association.

Wood was asked during the Q&A portion of the event whether he thinks California and the West Coast will see a repeat of the power problems that plagued the region late last year and earlier this year.

“It’s not been raining a whole lot out there,” Wood said. “And, I think, my focus now shifts to the Northwest because they are a winter peaking system, electrically, and I remain concerned that that part of the country still has the worst yet to come.”

At a later point, Wood was asked if a looming deadline related to the formation of regional transmission organization (RTOs) of mid-December is running up against new concerns over security in the wake of the September 11 terrorist attacks.

At the Commission’s most recent open meeting, Wood addressed the December 15 date in Order 2000 related to RTO formation. The chairman recommended that December 15 be changed to be the date by which all jurisdictional utilities must either elect to join an approved RTO organization, or have all market-based rate privileges by any corporate affiliate be prospectively revoked, following a Section 206 investigation.

In response to the question, Wood noted that the transition to fully functional RTOs “is measured in calendar quarters, not weeks or months.” He said that it will be “a couple of years before each of these really are up and operating” in a manner similar to PJM Interconnection, for example. “I think, quite frankly, what was a good idea for competition three weeks ago, is an imperative idea for reliability today and that’s these RTOs.”

Wood also noted that the terrorist attacks “have elevated the need for us at the Commission to emphasize redundancy of infrastructure.” That emphasis includes the importance of having a robust natural gas delivery system, as well as having an electric transmission grid that is sufficiently robust and strong. “A big part of what we’re doing is ensuring sufficiency of infrastructure — there’s no way around that.”

In addition, Wood gave his thoughts on FERC being given eminent domain authority for transmission siting. Noting his previous experience as a state regulator, the chairman said he has mixed feelings on the subject: “just as a fail safe, we should probably have it.”

Rep. Joe Barton (R-TX) has circulated a discussion draft of electricity legislation that would allow FERC to extend eminent domain authority for transmission siting to an applicant seeking to construct transmission lines, but only if states have not responded within 12 months or rejected a proposal in the public interest.

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