FERC in 2001 proposed a "standard market design" which would have required utilities to combine their grids into super-regional networks with independent operators.
Southeast lawmakers, led by Republican Sens. Richard Shelby of Alabama and Trent Lott of Mississippi, inserted language in a comprehensive energy bill that would bar FERC from pursuing such plans before 2007. The bill is stalled in the Senate because of a separate controversy over a gasoline additive, and could be taken up later this month.
In a Feb. 3 letter, Southeast officials said FERC intends to revive its market design proposal through rulings which would make it difficult for the region's utilities to operate without joining the regional groups.
"This is inaccurate," Wood responded in a letter. "Our proposal is intended to ensure all wholesale customers have the same protection from generation market power," whether or not they are located in regions with up-and-running regional grid operators.
Wood also disputed Southeast governors' complaint that FERC was trying to
preempt state authority through a preliminary order that requires giant utility
American Electric Power Co. Inc. Wood pointed out that AEP's membership decision was voluntary, and cited
studies showing that customers served by the new grid could save about $930
million a year.
"This is a dispute among states involving transmission and wholesale
power in interstate commerce," Wood wrote. FERC wants to referee the
dispute "in a way that brings about the best result for customers," he
wrote.
States that have criticized FERC include Arkansas, Georgia, Missouri,
Mississippi, Louisiana, Kentucky, South Carolina, North Carolina and West
Virginia.
Southeast utilities including Southern Co. Last week, a group of Southeast power companies said the action means
"the road to a competitive market in the Southeast essentially remains
blocked." The group, which includes units of Royal Dutch/Shell
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