Thank You For Submiting Feedback!
The Regional Transmission Organizations (RTO) play a key role in the effort by the Federal Energy Regulatory Commission to promote competition in those areas of the industry amenable to competition, such as the segment that generates electric power, while ensuring that the segment of the industry characterized by natural monopoly—namely, the transmission grid that conveys the generated electricity—cannot exert monopolistic influence over other areas. To further pry open the wholesale-electricity market and to reduce technical inefficiencies caused when different utilities operate different portions of the grid independently, the Commission has encouraged transmission providers to establish Regional Transmission Organizations—entities to which transmission providers would transfer operational control of their facilities for the purpose of efficient coordination and has encouraged the management of those entities by Independent System Operators, not-for-profit entities that operate transmission facilities in a nondiscriminatory manner.
Petitioners complained that Federal Energy Regulatory Commission’s (FERC) approval of the multi-value projects (MVP) tariff coerced each state to approve all MVPs proposed within its territory.
Was FERC’s approval of an RTO’s rate design and pilot project for an order proper?
The appellate court found that FERC was not ordering states to build transmission lines that the federal government wanted to use for its own purposes. FERC required the RTO to provide annual updates on the status of the projects. FERC could modify or rescind its approval of the MVP tariff. It could be presumed that new transmission lines benefited the entire network by reducing the likelihood or severity of outages Michigan utilities and the state's electric power regulatory agency could not discriminate against out-of-state renewable energy. Michigan failed to indicate what evidence that it might present in an evidentiary hearing would contribute to the date and analysis in the record already before FERC. The RTO and FERC were entitled to conclude that the benefits of more and cheaper wind power predominated over the benefits of greater reliability brought about by improvement in meeting peak demand. FERC had to determine what if any limitation on export pricing to another RTO was justified.