The Federal Energy regulatory Commission has proposed a rule that would require U.S. electric utilities to provide open access to the nation's interstate transmission network.
Under the proposed rule, which is similar to restructuring of the U.S. natural gas pipeline industry, all utilities under FERC jurisdiction would be required to file nondiscriminatory open access transportation tariffs that would be available to all wholesale sellers and buyers of electrical power.
The rule would be important to the petroleum industry, in view of the growing number of oil companies launching operations as independent power producers (IPPs).
THE PROPOSAL
Under FERC's proposed rule, utilities would be required to take service under the tariffs for their own wholesale sales and purchases of power. They would be permitted to recover additional costs caused by the rule.
Elizabeth Moler, FERC chairman, said, "Marketplace economics have changed. Customers are simply demanding access to lower cost supplies in other regions and access to newer, lower cost generation resources."
She said the FERC rule would require utilities to make their systems available to foster competition in generation. "In many cases, this is a fundamental change in the historic expectations of utilities as power suppliers."
FERC said 137 utilities will be required to open their lines. Only 21 utilities have any form of open access today.
Nicholas Bush, Natural Gas Supply Association president, cited importance of the proposed rule to natural gas producers.
"IPPs are a foundation on which to build a more competitive electricity sector. Therefore, we will examine proposals closely to ensure that IPPs can compete on an equal basis with utilities for current and new business."
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