5.3. ERMUSR 03-08-2005 - Laserfiche WebLink

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///1///1/I.~-, Minnesota Municipal Uti/itie~s Association Transmission P®sition statement The Energy Policy Act, supported by public power when it was passed by Congress in 1992, was to have promoted competition in the wholesale electric market by ensuring non-discriminatory access to the transmission network. Since that time, this effort has proved to be a much more formidable task than was first thought. r d Public power communities are finding it more difficult than ever to secure reliable and s reasonably priced wholesale power as a result of decisions made by the Federal Energy ~, Regulatory Commission (FERC) concerning the governance of the transmission network. Public power entities have also encountered serious problems in dealing with the regional o transmission organizations (RTOs) designated by FERC to manage the regional transmission grid. s In order to continue to provide their electric customers with reliable power at reasonable 3 rates, Minnesota municipal electric utilities need action by the federal government to ensure the construction of adequate transmission facilities and workable transmission policies. To assure this outcome, several actions will be needed from Congress and from FERC. w Actions Requested of Congress and FERC Enact Reliability Standards. After the massive blackout that occurred in August, 2003, there is universal agreement in the electric industry that mandatory reliability standards are necessary to ensure the future reliability of the electric system. Therefore, Congress should enact legislation establishing a system of mandatory, enforceable reliability rules ~_ that include meaningful penalties. This legislation should be enacted immediately and not `° be held hostage as part of a comprehensive energy bill. Enact Backstop Federal Transmission Siting Authority. Siting transmission facilities is often controversial and time consuming. While states rightfully have primary responsibility to authorize the construction and location of these facilities, delays in this o process could significantly disrupt construction of new facilities needed to run an efficient interstate transmission system. Congress should enact new legislation that requires the Department of Energy to regularly assess transmission adequacy and ~ empowers FERC to authorize the siting of transmission facilities needed to eliminate congestion. Grant FERC Authority to Prevent Market Manipulation. The complicated nature of wholesale market transactions and the congestion that already exists in the transmission system have tempted some transmission owners and marketers to attempt to game the system in an effort to enhance profits. To protect their customers, municipal electric utilities favor an effort to prevent such manipulation. While FERC has attempted to curb