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Enron Mail |
The Commission issued an order on May 8, 2001 in Illinois Power Co. Docket
No. ER01-123 (as well as ComEd, Ameren and Alliance) that accepted the Settlement filed by the Alliance and MISO on 3/31/01. The Settlement: provided for the continuation of two separate RTOs in the Midwest - ARTO and MISO - to be operational by 12/15/01 provides for a single, non-pancaked Super-Regional rate for transactions with sources and sinks within the two- RTO Super Region provides that ARTO and MISO will negotiate with PJM to develop a joint rate methodology includes an Inter-Regional Cooperation Agreement committing the ARTO and MISO to develop compatible protocols and formats, share information and data, develop a combined reservations and scheduling system, coordinate on TLRs, and develop procedures for real-time operational disputes. allowed withdrawal of IP, ComEd and Ameren from MISO to join ARTO with an exit fee of $60 million to cover start up costs. Enron had filed comments opposing the settlement arguing that it failed to resolve the issues of the Midwest market. Enron argued the the settlement did not provide for sufficient RTO scope, did not resolve rate pancaking, parallel path flow, and other operational and seams issues. The Commission's order on the settlement continues the Hebert "incremental approach" to RTO's that it has exhibited in its prior RTO orders. The Chief Judge had certified the settlement over Enron's opposition, claiming Enron was asking the FERC to go beyond the scope of Order No. 2000. Some of the important findings in the order are summarized below. Accepted the Alliance stakeholder process over objections of Enron and several marketers. Alliance will file its stakeholder plan by May 15 and parties may raise concerns at that time. This does seem a late filing given that the RTO is to be operational by 12/15/01. In the meantime, Alliance has held three meetings, focusing on interconnection procedures and congestion management. They are continuing to meet with stakeholders every two weeks - this seems better than required by this order. The Super-regional rate is not applicable to imports of generation into the Region. This is definitely an example of the "incremental approach." The Commission was very impressed that the Alliance and MISO represented the largest areas ever proposed for elimination of rate pancaking. The order did recognize the competitive advantage this gave to generators within the Super Region vis-a-vis those located outside the Region, but noted that absent the settlement, transactions would incur two separate transmission rates. Sufficiency of scope and configuration will be determined in the respective RTO dockets. Although the settlement provided that the scope of ARTO and MISO were sufficient, the Commission refused to make that determination in this order. Note that the Alliance scope and configuration has been found to be sufficient to comply with Order No. 2000 in the Alliance January 24, 2001 order. Enron argued the Midwest transmission grid should be under the control of a single operator to provide for a seamless market. The FERC finds that issue to be premature. This is again the "incremental approach;" the Commission encourages further efforts to build on the framework of the settlement to develop common processes and move toward an ultimate goal of a single operational RTO for the Midwest. This open-ended issue may provide a good opportunity to set up a meeting with FERC staff to discuss future steps to work toward this ultimate goal. Enron had argued that the IRCA was not a sufficient commitment to a seamless Midwest market. The order accepts this aspect of the settlement, but allows that Enron and all parties can raise further concerns once coordination proposals are filed. The Commission will not require joint energy imbalance and congestion management mechanisms at this time. FERC found no basis in Order No. 2000 to find that multiple systems could not be compatible. The order did not address Enron's argument that the settlement should provide for a real-time energy market, rather than just a balancing market. A market monitoring committee is to be formed which will agree upon an independent market monitor for the Cooperating RTOs. The settlement provides for a moratorium on the transitional pricing structure through 2004, subject to an exception for new investment.. The FERC accepts this provision due the rate certainty it provides. If you want a copy of the order, let me know.
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