US FERC rule on transmission could force costly changes

US FERC rule on transmission could force costly changes: IOUs

Washington (Platts)--18May2004


Rule changes designed to further separate energy affiliates from
transmission-owning parents may force utilities to dramatically alter business
operations, several utilities have told the US Federal Energy Regulatory
Commission. In comments submitted to the agency Monday, the utilities, led by
American Electric Power and Southern Company, said that without clarification,
FERC's refurbished rule on transmission providers' standards of conduct will
force some companies to make major and costly changes. "Should these rules be
interpreted as currently suggested...their implementation could result in
unintended consequences, forcing AEP to make drastic changes in the manner in
which it conducts its business," Columbus, Ohio-based AEP said. At issue is
the standards of conduct rule FERC tweaked last month. The agency approved its
standards of conduct rule last fall in an effort to prevent transmission
providers from extending their market power to other aspects of the energy
market by giving any affiliates unduly preferential treatment (RM01-10).

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