6.6. ERMUSR 01-11-2005 - Laserfiche WebLink

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Somewhere along the RTO-development road, the original business purposes oCR"I'Os that FI?RC envisioned (to provide non-discriminatory transmission service, eliminate transmission rate pancaking, It iS tIInB t0 reOrlentRTOS ~ and provide a vehicle for joint planning and construction towards their original miSSion• of transmission facilities-a11 for the benefit of electric .providing adequate;. reliable.. consumers) morphed into a different mission and agenda. Today, the "business" of RTOs appears to be to develop and reasonably`priced regional markets for every possible product, whether or not such tranSRIISSion Service t0 bring markets are necessary, competitive and cost-effective, and COSt SBVIngS tOCOnSllmerS. to serve the needs and desires of regulators and preferred classes of stakeholders, rather than electric consumers. It is time to reorient R"TOs towards their original mission: pro~nding adequate, reliable and reasonably priced regional transmission service to bring cost savings to consumers. Ways to Advance Transmission Policv Goals in Regions Without RTOs T Because of regional differences, and the largely negative experiences of their counterparts in RTO regions, many r1PPA members oppose thc° expansion of RTOs to their own regions. The problems created by the formation of RTOs have proven to be more significant than Ilrst anticipated and the benefits have proven to be more elusive. These APPA members believe there are more cost-effective means to provide open access transmission and promote market efficiency in their regions. F>/RC should abandon its "RTO-or nothing" approach to transmission policy. Regional initiatives that enhance the efficiency of markets with minimal added cost and risk should be encouraged and supported, not discarded as inconsistent with FERC's SAID template. Regional differences are real and have to be respected. Solutions tailored to the needs of each region should be pursued that meet the goals set forth in the Introduction to this ~~'IIITE I'.1PER. FF.RC must also fully appreciate the deep and abiding concerns that public power systems, especially those in the West, have about electric. restructuring and RTO formation in the wake of the meltdown of ~~~'estern power markets in 2000. Many public po~~~er s}~stems are skeptical that FLRC has the ability or the will to move quickly and effectively to address abuses of market power, and protect consumers froru paying unjust and unreasonable rates (or even to make them whole later). Until these past problems are meaningfully resolved, Restructuring at the Crossroads: FERC Electric Policy Reconsidered 19