D.C., Md. power regulators assail FERC regional plan

They fear grid proposal could prove costly

October 04, 2001|By Dan Thanh Dang | Dan Thanh Dang,SUN STAFF

Regulatory officials in Maryland and the District of Columbia said yesterday that a federal order merging the mid-Atlantic, New York and New England power grids into one regional network could prove costly, harm reliability and delay competition in deregulated states.

In a rare joint hearing of the two Public Service Commissions, regulators voiced concern that the rush to create four regional transmission organizations (RTOs) could jeopardize the Northeast's economic future.

Maryland commissioners criticized the Federal Energy Regulatory Commission for moving too quickly without proper examination or cost benefit analyses.

The commissions teamed up with their counterparts in Virginia in August to file a request for a rehearing on the issue and a stay of the federal panel's July 12 order. If the panel does not grant the states' request, a lawsuit is possible, the Maryland PSC said. Federal regulators are expected to issue a decision Nov. 1.

"We are not questioning substance," said Claude M. Ligon, a Maryland PSC commissioner. "We are questioning process. A time to prepare for a storm is not while the hurricane is raging. Where is the voice of caution?"

Merging the highly regarded Pennsylvania-New Jersey-Maryland Interconnection (PJM) with independent system operators in New York and New England to manage power distribution should be put on hold, the panels said.

More research needs to be gathered on possible benefits, transition costs and problems that might result from the merger, they said.

The federal energy commission wants to create four RTOs across the country to improve competition, transfer power more easily from region to region and cut the price of electricity. If approved, portions of the plan could take effect as soon as next year.

But Maryland Commissioner J. Joseph Curran III worried that the merger could ruin deregulation settlement agreements and rate freezes now in effect by driving up transmission rates for Maryland utilities, because New York and New England's rates are higher.

Local utility companies said those agreements are safe because transmission companies - such as Baltimore Gas and Electric Co. and Potomac Electric Power Co. - would have to absorb those increases.

Maryland PSC Chairman Catherine I. Riley said customer choice would be delayed further by the federal panel's order because it creates an unstable environment that could discourage electricity suppliers from entering Maryland's market.

"Hasty marriages are rarely good marriages," said Angel M. Cartagena Jr., chairman of the Washington Public Service Commission.

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