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Executive Summary <br />t is time to take stock of the Federal Energy Regulatory Commission's <br />("FERC") electric restnicturing policies. APPA believes substantial <br />"mid-course corrections" to FERC's policies are needed to fix existing <br />Regional Transmission Organizations (`RTOs") and to encourage non- <br />RTO alternatives in those regions where RTOs are not likely to Corm. <br />To protect electric consumers, as the Federal Power Act ("FPA") requires, <br />FF;RC should reorient its policies to make sure electric consumers in fact- <br />not just in economic theory-benefit from elects°ic restructuring. <br />FERC should: <br />1 Ensure appropriate investment in transmission and <br />generation infrastructure; <br />1 Kecognize and respect regional industry differences and preferences; <br />1 Encourage cost effective and not overly complex regional solutions; <br />1 Support rational long-term generation resource arrangements that <br />are in turn supported by long-term transmission service provided at <br />just and reasonable rates; <br />1 Foster ~~eell-functioning wholesale electric markets; and <br />1 Ensure that public utility sellers of power at market-based rates <br />charge `just and reasonable" prices. <br />APPA members in RTO regions report substantial, across-the-board <br />problems with spiraling RTO costs, unaccountable RTO governance, and <br />ever-increasing provision of RTO ser~~ces through questionable market <br />mechanisms. These APPA members are unable to obtain or even retain <br />long-term firm transmission service atjust and reasonable rates. This is <br />impairing their ability to enter into the long-term generation resource <br />arrangements thev need to provide reliable and affordable electric <br />sf:rvice to their end-use customers. <br />Because of regional differences and the largely negative experience of <br />APPA members now served by RTOs, many APPA members in non-RTO <br />regions oppose RTO expansion to their own regions. These APPA <br />members believe there are more cost-effective means to provide open <br />access transmission service and to promote market efficiency, including: <br />joint development of regional Open Access Sarne-time Information <br />Restructuring at the Crossroads: FERC Electric Policy Reconsidered iii <br />