Open Access and Transition Costs: Will the Electric Industry Transition Track the Natural Gas Industry Restructuring?*

By Santa, Donald F., Jr.; Sikora, Clifford S. | Energy Law Journal, January 1, 2004 | Go to article overview

Open Access and Transition Costs: Will the Electric Industry Transition Track the Natural Gas Industry Restructuring?*


Santa, Donald F., Jr., Sikora, Clifford S., Energy Law Journal


I. INTRODUCTION

The Energy Policy Act of 1992 (EPAct)1 marked the first comprehensive energy policy legislation enacted in the United States in over a decade. Title VII of the EPAct2 amended the Public Utility Holding Company Act of 1935 (PUHCA)3 and the Federal Power Act (FPA),4 two New Deal era laws that constitute much of the statutory framework for federal regulation of the electric power industry. These amendments have been hailed as "two notable revisions to previous law that will eventually reshape the electric power business in North America."5 While competitive forces already were taking root in the electric power industry prior to the enactment of the EPAct,6 the new law has been a catalyst for change in the industry and its regulatory environment. Even the EPAct's authors have been surprised by the pace of change that has occurred in the two years following the statute's enactment.7

Title VII of the EPAct has changed the legal landscape for the electric power industry in two ways. First, it gives the Federal Energy Regulatory Commission (FERC or Commission) expanded authority under section 211 of the FPA to order certain entities to transmit ("wheel") electricity for third parties.8 Second, title VII amended PUHCA to create a class of electricity sellers known as Exempt Wholesale Generators (EWGs). The availability of EWG status has lowered regulatory hurdles to generation market entry previously imposed by the PUHCA.9

Following enactment of the EPAct, the Commission has taken major steps to implement both the letter10 and the spirit" of the new amendments to the FPA. The FERC has construed its charge under the new law in terms of its interpretation of the Congressional intent underlying title VII: to foster competition in wholesale electricity markets in general, and to do so by means of open access to transmission services in particular.12 Consequently, the FERC has moved forward assertively to facilitate the emergence of a more competitive bulk power market.

In this regard, FERC's post-EPAct electric policy initiatives have included the following:

(1) A final rule establishing filing requirements and ministerial procedures for persons seeking EWG status under section 32 of the PUHCA, as added by section 711 of EPAct;13

(2) A notice of technical conference and request for comments concerning the Commission's policy for pricing transmission services;14

(3) A policy statement establishing the requirements for "good faith" requests for section 211 transmission service;15

(4) A policy statement issuing guidance for, and extolling the virtues of, Regional Transmission Groups (RTGs);16

(5) A final rule requiring transmitting utilities to file information periodically regarding their transmission systems, including capacity and constraint information;17

(6) A generic policy, first articulated in an adjudication, requiring that transmission owners provide to third parties transmission access which is the same or comparable to the access which the transmission owners provide to themselves;18

(7) A general policy, first articulated in an adjudication, that all "new" sellers of unbuilt generating facilities lack generation market power;19 and

(8) A notice of proposed rulemaking regarding so-called "stranded costs."20

Access to electric transmission facilities has been the predominant theme of the Commission's post-EPAct electric policy initiatives. Five of the eight initiatives mentioned above relate directly to making access to transmission facilities more widely available. The Commission recently explained why transmission access is particularly important to the development of a competitive bulk power market, and ultimately, to the possibility for lower electricity costs to ultimate consumers:

As a genera] matter, the availability of transmission service (or increased flexibility to use transmission) will enhance competition in the market for power supplies over the long-run because it will increase both the power supply options available to transmission customers (thereby benefiting their customers) and the sales options available to sellers. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Open Access and Transition Costs: Will the Electric Industry Transition Track the Natural Gas Industry Restructuring?*
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.