http://www.dallasnews.com/business/stories/332404_power_07bus.AR.html Power grid fights may end

Agency pressure may force utilities in South to negotiate

04/07/2001

Dow Jones Newswires

HOUSTON – A battle over who will control major power lines in the South is taking a new direction.

Five groups that have been vying to operate lines in a region that stretches from Florida to Virginia, east to Texas and as far north as Kansas, say they're ready to talk to one another seriously.

The reason? Recent Federal Energy Regulatory Commission rulings on plans to create grid groups known as regional transmission operators.

The South needs well-designed RTOs to help with chronic bottlenecks that keep power from flowing freely between big transmission line owners, many energy companies say.

Despite the new move toward collaboration, the region has a long road ahead.

"I don't see anything clearing up in the South soon," said Jolly Hayden, vice president of power delivery for Dynegy Inc., a major electricity marketer and power plant owner.

FERC has pushed the creation of RTOs as a means to protect fair practices in deregulated markets.

Until now, Southeast utilities have pursued individual RTO plans to delay open transmission access as long as possible, some critics charge.

The companies have countered that they've had no incentive to relinquish a valuable asset.

Whatever the cause, the region has produced a bewildering array of RTO plans.

Last week, FERC turned down a proposal by Southern Co. affiliates to create a one-utility RTO covering Georgia, Alabama and parts of Mississippi and Florida.

The agency also gave an initial green light to the GridSouth Transco, which would include Progress Energy's Carolina Power & Light, a Duke Energy utility affiliate, and SCANA Corp.'s South Carolina Electric & Gas Co.

FERC urged Southern to join GridSouth or another neighboring RTO.

The agency also told the Southwest Power Pool, a group that oversees the grid in parts of eight states including Texas, Oklahoma, New Mexico, Arkansas and Louisiana , that it needs to do more work on its RTO proposal.

But it approved a plan by GridFlorida, which covers the Florida peninsula, and another by Entergy utilities that operate in Louisiana, Arkansas, Mississippi and Texas.

Southern has started setting up meetings with nearby grid organizations "to see what the possibilities are," a spokesman said.

GridSouth officials are also anxious to meet with Southern, said Duke spokesman Joe Maher.

"From our standpoint, we don't preclude anybody," he said.

The region's battles highlight a critical need to reform the U.S. electric grid to support further deregulation, according to industry analysts and regulators.

What's needed is an infusion of capital to expand and upgrade an infrastructure that wasn't designed to meet the superhighway demands placed on it by skyrocketing wholesale power competition, according to the Cambridge Energy Research Association.

-- Anonymous, April 07, 2001