Pa. PUC chairman tells federal regulators that standard market design is essential to competition

HARRISBURG, Pa., Dec. 3, 2002 — A Standard Market Design for the nation’s electricity transmission system is essential to maintaining reliability and to fostering competitive power markets, the Chairman of the Pennsylvania Public Utility Commission (PUC) testified before federal regulators Tuesday.

PUC Chairman Glen R. Thomas, participating in a technical conference hosted by the Federal Energy Regulatory Commission (FERC) in Washington, D.C., said FERC’s proposal to create a Standard Market Design is a logical step to assure open access to the country’s transmission grid. In its proposal, FERC seeks to standardize the pricing of and practices associated with wholesale, interstate electric transmission service.

“Starting from the early 1990s — shortly after the passage of the Energy Policy Act Amendments in 1992 — your Commission has sought ways to assure open access to the transmission grid with comparability of rates, terms and conditions of service,” said Chairman Thomas. “The Pennsylvania PUC views the Standard Market Design proposal as a logical and necessary progression along that path.

“From Pennsylvania’s perspective, Standard Market Design is ultimately essential to the successful operation of both wholesale and retail markets in the Eastern interconnection. The transmission grid is the `superhighway’ over which the commerce of energy moves. Access to that highway and the rules of the road must be clear, fair and economically rational.”

Chairman Thomas focused most of his testimony on the SMD-related issue of congestion revenue rights, which protect parties against the costs of congestion for transmission service.

In September, the PUC held a public hearing to solicit comments on the FERC proposal from companies and individuals who actually operate and use the transmission grid. After reviewing comments from approximately a dozen businesses, utilities and consumer representatives, the Commission filed initial comments on the proposal on Nov. 15.

Pennsylvania has an interest in the proceeding because of its success with electric competition and because it is a home state for the PJM Interconnection, the high-voltage transmission grid that serves the Mid- Atlantic states and the District of Columbia.

The Pennsylvania Public Utility Commission ensures safe, reliable and reasonably priced electric, natural gas, water, telephone and transportation service for Pennsylvania consumers, by regulating public utilities and by serving as responsible stewards of competition.

Source: Pennsylvania Public Utility Commission


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