Competition in the Electric Industry Emerging Issues, Opportunities, and Risks for Facility Operators (1996) / Chapter Skim
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The Federal Energy Regulatory Commission's Open Access Rule
The Federal Energy Regulatory Commission's Open Access Rule
Pages 6-12
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From page 6... ...
Sales among large, vertically integrated investor-owned utilities, which sell power to one another to minimize costs or improve reliability Sales from the integrated utilities to distributors, such as municipalities and rural cooperatives that mainly operate distribution systems and in general must buy their power from others Sales from independent power producers (IPPs) to either investor-owned utilities or small distributors.
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From page 7... ...
On April 24, 1996, the Federal Energy Regulatory Commission issued two major orders, Orders 888 and 889, which we think will speed the progress of the electric utility industry toward a competitive structure. Specifically, Orders 888 and SS9: Transmission Access Ordered all public utilities to provide non-discriminatory open transmission access Adopted comparability standards and functional unbundling to help guard against discrimination Provided for stranded cost recovery Announced procedures for sharing transmission system information Required a wholesale marketing Code of Conduct Proposed to adopt a Capacity Reservation Tariff Established a schedule for implementation.
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From page 8... ...
It sells itself transmission service, in a sense, to market the services of its generating assets. A public utility transmission owner must provide transmission service to all other market participants on terms comparable to those under which it provides service to itself.
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Privileged or inside transmission information can no longer be passed between the transmission operation part of the utility and the wholesale marketing part of the utility. Functional unbundling is a way of separating a utility's marketing and transmission functions to ensure fairness.
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From page 10... ...
If they wish to stray from those terms, their terms must be better for customers. One condition of taking service under the pro forma tariff is "bilateral reciprocity." This condition is meant to address the problem that not all transmission owners are jurisdictional to the FERC; for example, publicly owned and foreign owned transmission systems are not.
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From page 11... ...
. Immediately afterwards, utilities may ask for changes to the pro forma tariffs, as long as the changes are improvements from the customers' point of view or reflect regional practices.
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From page 12... ...
Organizing transmission service this way should result in better planning and facilitate a resale market. A technical conference will be held and comments received on this proposal in the fall of 1996.
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