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A Hard Road Ahead For RTO West
As expected, the filing for a proposed Regional Transmission Organization (RTO ) by the Northwest's transmission-owning utilities was quickly followed by comments and "protests" from virtually every other electricity-related entity in the region. The intensity of objections to the filing with the Federal Energy Regulatory Commission (FERC ) likely means the region is still a long way from forming a single, seamless, highway for transmitting power.
Most of the comments. however, supported the basic proposed structure of what is known as "RTO West ." The filed bylaws create a Board of Trustees completely independent of all market players. While the consensus on a ruling board is significant, it also represents the only area of agreement.
Most of the state agencies, marketers and power plant developers strongly criticized the way the market for transmission rights needed by anyone wanting to transmit electricity from generator to load would be operated. They argued there would be little truly market-driven behavior by end-users or generators, a key goal of RTO formation. The lack of a robust market would be particularly harmful to developers of renewable resources and small "distributed" generators, who would find it difficult to obtain long-term rights to transmit their power.
The other main criticism was that proposed incentives to maintain reliability are, at worst, unworkable, and, at best, too tilted toward transmission solutions. Critics argue that prohibitions on investments in energy conservation, load shifting (to off-peak times) and incentives to locate new generation strategically mean the RTO would not follow a least-cost path.
The filing utilities have pledged to "tweak" their proposal, but most parties believe much more than tweaking is needed to fix the RTO. Given the agency's enormous workload, most observers feel FERC will have to delay its original December 2002 deadline for RTO formation by a year or more.
Steven Weiss