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FERC tackles rates of return, other key issues at June 19 meeting

From the June 20, 2014 issue of Public Power Daily

Originally published June 20, 2014

By Robert Varela
Editorial Director

The Federal Energy Regulatory Commission at its June 19 meeting issued a number of orders of significant interest to public power utilities. Notably, the commission adopted a new methodology for determining rates of return for transmission facilities (see story below), and denied requests by APPA and others for rehearing of an order adding a geographic limitation to the Federal Power Act’s preference for municipal applicants for hydro licenses. Here is a short recap of the commission’s major actions at its June 19 meeting:

Preference principle. FERC denied requests by APPA, the Public Power Council and Western Minnesota Municipal Power Agency for rehearing of a December 2013 order ruling that the Federal Power Act’s preference for municipal applicants for hydro licenses is limited to municipalities "in the vicinity" of the hydro project.

Price formation in RTO markets. The commission initiated a proceeding to examine limitations to accurate prices in energy and ancillary services markets operated by regional transmission organizations.

Market-based rates. The commission issued a notice of proposed rulemaking designed to simplify the process for getting permission from FERC to charge market-based rates for wholesale sales of electric energy, capacity and ancillary services.

CAISO energy imbalance market. FERC conditionally accepted the California Independent System Operator Corporation’s (CAISO) proposal to implement an energy imbalance market, and conditionally accepted in part revisions to PacifiCorp’s open-access transmission tariff to reflect the utility’s participation in the market. Commissioner John Norris said "this isn't an effort to push [the region’s] 38 balancing authorities into an RTO West."

Geomagnetic disturbance standards. The commission adopted a new North American Electric Reliability Corp. standard to mitigate the impacts of geomagnetic disturbances on the bulk power system.

More in-depth articles on these orders will appear in future issues of Public Power Daily.

Editor's note: This article was revised to correct a quote from Commissioner John Norris.


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Vice President, Integrated Media and Communications
Meena Dayak

Editorial Director
Robert Varela

Editor, Public Power Daily
Jeannine Anderson

Communications Assistant
Fallon W. Forbush

Manager, Integrated Media 
David L. Blaylock

Integrated Media Editor 
Laura D’Alessandro