Enron Asks US FERC To Link Mkt-Based Pwr Rates With RTOs

11/20/2000
Dow Jones Energy Service
(Copyright (c) 2000, Dow Jones & Company, Inc.)

WASHINGTON -(Dow Jones)- Enron Power Marketing Inc. is urging federal 
regulators to withdraw the authority of several electric utilities in the 
U.S. Southeast to sell power at market rates if they fail to join an approved 
independent grid-asset operator by Dec. 15, 2001. 
The Enron Corp. (ENE) power-marketing unit made the suggestion in filings 
Friday in response to the U.S. Federal Energy Regulatory Commission's 
December 1999 order encouraging U.S. utilities to turn their high-voltage 
transmission assets over to independent control of regional transmission 
organizations, or RTOs.
The filing came the same day that FERC Commissioner William Massey told a 
gathering of energy lawyers that he would seek to ensure that FERC - on a 
generic, national basis - makes preservation of market-based sales authority 
by utilities contingent upon their joining an FERC-approved RTO. 
Enron limited the applicability of its filing to RTO proposals from utilities 
in the U.S. Southeast: Carolina Power & Light Co. (CPL), Duke Energy Corp. 
(DUK), Florida Power Corp. (FPC), Florida Power & Light Co. (FPL), South 
Carolina Electric & Gas Co. (SCG), Southern Co. (SO). Tampa Electric Co. (TE) 
and the Southwest Power Pool Inc. 
Absent participation in a FERC-approved RTO, "there is no basis for the 
commission to assume that a transmission owner has mitigated its transmission 
market power and ability to discriminate against its transmission-dependent 
competitors," Enron said in its filing. 
Enron noted that FERC called for creation of RTOs after determining that its 
landmark 1996 rules requiring open-access transmission services weren't 
enough to assure that vertically integrated utilities couldn't control their 
transmission assets to financial gain in competitive wholesale power markets. 
"The commission has repeatedly recognized that vertically integrated 
transmission system owners have an inherent incentive to use their 
transmission monopolies to discriminate in favor of their own and affiliated 
power merchant activities," Enron said. 
The Houston energy giant noted that FERC staff, in a report detailing 
findings of a national investigation of problems affecting competitive 
wholesale power markets nationally, found that market participants in the 
Southeastern U.S. have less confidence than market participants in other 
regions of the country that their transactions won't be subject to 
discriminatory practices. 
"Selling power at market-based (as opposed to cost-based) rates is not a 
right, but rather a privilege enjoyed by sellers that can demonstrate that 
they are price takers, unable to exercise market power," Enron said. 
"Any vertically integrated transmission monopoly that stops short of taking 
every step that the commission identifies as needed to abate market power and 
root out discrimination should be denied the privilege of selling power at 
market-based rates. It simply cannot be trusted not to abuse the privilege," 
Enron said. 
-By Bryan Lee, Dow Jones Newswires, 202-862-6647, bryan.lee@dowjones.com

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