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substantial transmission constraints, and the relati~-~ irnpor~lancc of <br />point-to-point transmission versus net~~-ork service. <br />APPA therefore believes that regional diversity in the prop°ision of <br />transmission service must be acknowledged, and a pragmatic and flexiblf: <br />federal transmission policy implemented to deal with the reality "on <br />the ground." In both cases, ho~~~ever, the same principles should govern <br />policymaking: fostering the development of cost-effective transmission <br />and generation infrastructure; supporting long-term power supply and <br />u-ansmission arrangements at just and reasonable rates, including the <br />capacity rights to deliver power supplies to loads; developing cost- <br />effective and responsive regional solutions that meet regional needs; <br />promoting market transparency; and preventing the exercise of <br />generation market power. The ultimate goal sl~rould be supporting <br />delivcrv of reliable, low-cost electric power to consumers. <br />Needed "Mid-Course Corrections" in <br />Those Regions with Existing RTOs <br />,1PPA members in RTO regions report substantial problems that irnp<rir <br />their ability to provide reasonably priced and reliable long-term service to <br />their own electric consumers. 'This is not to say that all RTOs <br />APPA membeCS In RTO are without valve and should simply be dismantled. They have <br />reglotlS report Substantial eliminated pancaked transmission rates (allowing transactions <br />problems that Impair their to take place over a broader geographic area, provided that <br />the necessary transmission infrastnacture is available) and <br />ability to provide reasonably <br />developed transparent spot markets in which APIA members <br />priced and reliable long- <br />can purchase needed incremental power and lay off excess <br />term service to thelrOWn short-term power. But APPA is alarmed acrd dismavcd by <br />electric consumers. the level of discontent among its members regarding RTO <br />performance, and the common concerns many members <br />express across mt.dtiple RTO regions. Clearly, corrective actions are <br />needed. The concerns of APPA members in RTO regions include: <br />Load-Serving Utilities Must Be Able to Retain/Obtain Long-Term <br />"Firm" Transmission at Known and Reasonable Rates <br />Under the LNIP rcgirnes all fire RTOs use (or intend to implement), <br />transmission congestion is included in the price of transmission service <br />and is set by reference to nodal power supply prices in the RTO's <br />day-ahead market at the relevant points of generation <.rnd delivery. <br />l~he primary tool provided to transmission customers to offset such <br />congestion charges is the "Financial Transmission Right" ("FTR"). <br />Restructuring at the Crossroads' FERC Electric Policy Reconsidered 7 <br />