Business Editors/Energy Writers
PORTLAND, Ore.--(BUSINESS WIRE)--March 29, 2002--A coalition of
western electric utilities has asked the U.S. Federal Energy
Regulatory Commission to find that the RTO West proposal submitted
today meets FERC's minimum characteristics and functions for formation
of a regional transmission organization.
Under the RTO West proposal, the region's electric transmission
lines would function as a common carrier of wholesale electricity and
enable one-stop shopping for wholesale transmission services
throughout the Northwest geographic area.
"RTO West is designed to enhance reliability and create a more
stable environment for investment in the generation and transmission
resources needed to meet growing demand," Wayman Robinett of Puget
Sound Energy, Chairman of RTO West, said. "Having a single control
area for the region also would make the interstate market more
The coalition developing the proposal comprises Avista
Corporation, Bonneville Power Administration, British Columbia Hydro
and Power Authority, Idaho Power Company, NorthWestern Energy
(formerly The Montana Power Company), Nevada Power Company,
PacifiCorp, Portland General Electric Company, Puget Sound Energy and
Sierra Pacific Power Company.
The utilities are asking FERC to review a plan developed by the
utilities in a collaborative process over the past two years with
regional stakeholders, including transmission owners, electric
utilities without transmission, consumers, generators, marketers,
regulators and elected officials.
"Our goal is that Northwest consumers will benefit from the
formation of RTO West," BPA administrator Steve Wright said. "While
this isn't the final step in the process, the time is right to present
our regional progress to date to FERC."
During the FERC process, the Filing Utilities will be submitting
additional information and examining issues that remain to be
resolved. Some of the investor-owned utilities also require state
approvals before the RTO can begin operations, anticipated about 2005.
Recognizing Canadian sovereignty, regulatory approvals are
required in Canada for BC Hydro to participate.
An initial independent analysis indicates that the benefits of RTO
West for the region exceed the operational costs. The independent
study estimates that formation of RTO West would produce annual
savings of about $300 million for the region.
Operation of RTO West would likely cost $125 million to $140
million annually, including the amortized start-up costs. This figure
is based on benchmarking data from other RTOs across the country.
Recognizing fundamental differences between the West and other
regions of the country, RTO West's structure differs from other RTOs
being formed in the United States.
RTO West would reflect the region's large geographic spread and
dispersal of loads and generation. RTO West's structure also reflects
that hydroelectric power provides a significant amount of the
generation in the region, in contrast to the rest of the country.
RTO West, an independent non-profit corporation, would have its
own board and management independent of energy market participants.
Independent governance is designed to ensure that buyers or sellers of
electricity do not control transmission, assuring them of open access
to all sources of generation.
Through a new pricing structure, RTO West would eliminate
pancaking of rates. Currently, customers pay an additional
transmission fee when electricity moves from one system to another.
Under RTO West, the system would be analogous to motorists paying one
fee to their home state for a license plate that allows them to drive
their car anywhere within the country.
To avoid cost shifting among utilities, the utility customer pays
RTO West a single access fee based on the cost of the facilities of
the transmission owner. For example, a customer served from Bonneville
Power Administration facilities will pay the BPA Company Rate. This
prevents customers of one utility with historically low transmission
rates from experiencing a sudden rate increase or cost shift.
RTO West is designed to help remedy congestion by giving
transmission owners and developers of generation the appropriate
economic signals, leading to the construction of new transmission
facilities and placement of generation resources or demand-side
alternatives in the most beneficial locations.
The filing can be reviewed at the RTO West web site:
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