Delaware chemical plant files FERC protest at 40 percent transmission hike

August 20, 2002 — A chemical plant has filed with Federal Energy Regulatory Commission (FERC) to block a new $500,000 electricity transmission fee.

The Delaware City, Delaware, plant is owned by Occidental Petroleum Corp. Delmarva Power & Light has charged the plant $500,000 as an annual transmission fee for its power supplies, including its interruptible load, Reuters News Service reported.

The plant buys 60 MW from Delmarva Power, 51.2 MW of which is interruptible. The new power contract which would start in November represents a 40 percent increase on the plant’s usual annual electricity costs, largely because Delmarva is charging the same transmission demand charge for both firm and interruptible power.

The company complained in its filing with FERC that the plant may not be able to afford doing business at that location if power costs increase to that extent.

The chemical company has not been able to find an alternative electricity supplier because it said competitors cannot get the fixed transmission rights (FTRs) that Delmarva Power possesses, Reuters said.

PJM in July proposed to change the way the grid operator allocates the transmission rights. The grid operator is developing an annual auction for FTRs, a process which it said was consistent with FERC’s recently proposed standard market design.

Occidental Petroleum Corp. has asked FERC to make PJM to change its rules or find a way to give credit to the chemical plant for its interruptible load. It also wants Delmarva Power to assign the FTRs to the plant’s new supplier.

The Occidental case is pending before FERC in docket EL02-121. To read the case, visit FERC’s web site at http://www.ferc.gov.

To read more at PJM Interconnection’s web site, visit http://www.pjm.com/.

Occidental Petroleum Corp.’s web site is http://www.oxy.com/.

Delmarva Power is a unit of PEPCO Holdings Inc.

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