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Is power dereg
taking a powder?
by
Paula C. Squires
Virginia
Business
March 2003
Virginia’s trek toward electric competition is
slowing down. State officials and legislators threw
up a caution flag after the Federal Energy Regulatory
Commission released its proposal for regional electricity
markets.
State
regulators are skeptical of FERC’s plan to take
away state control over transmission systems and give
it to federally regulated regional transmission organizations
(RTOs). FERC also opposes giving Virginia consumers
first dibs on the output of power plants and lines built
by Virginia utilities and partly paid for by consumers.
The federal agency says such policies are out of step
in a competitive market.
So
far, there isn’t much competition for electricity
in Virginia because rates are relatively low. That’s
one reason Del. Harry J. Parrish, R-Manassas, sponsored
a bill that passed the House of Delegates last month
that would block Virginia utilities from joining an
RTO until after July 1, 2004. Originally, the state’s
restructuring law called for utilities to join by Jan.
1, 2001. “We felt it would be better to slow it
down a bit and give us some opportunities to see how
things will develop,” says Parrish.
Meanwhile,
utilities are gearing up to join RTOs. Dominion Virginia
Power and American Electric Power both plan to join
PJM Interconnection, a Pennsylvania-based RTO serving
the congested markets in Pennsylvania and other northeastern
states. Dominion Power hasn’t filed its application
yet, but Ohio-based AEP has already applied and has
spent several million preparing for it. Dan Carson,
Virginia president of AEP, says pushing back the RTO
deadline will do nothing to slow the application of
FERC’s standard market design if it becomes final.
“We’re not just talking about Virginia with
the AEP system. Seven states are involved, and to my
knowledge Virginia is the only one that will have a
date like this to prohibit transfers,” he says.
Carson hopes a compromise can be hammered out that will
make an exception to the deadline for companies that
have already applied.
Virginia
Business - March 2003
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