FERC Challenges Electric Industry

March 21, 2002
Bottom Line Energy Issues - March 2002 - Part 2
This is REALLY BIG, so pay attention. FERC issued a call in December, under Docket No. RM01-12-000, to the wholesale electric market to get its act together and create a new consensus standards organization by March 15 for rule making, or else “we will institute our own procedures either to choose an organization to develop such standards or to develop the standards ourselves.” Specifically, it wants to standardize “market design, business practices, and electronic communications protocols.” One likely candidate was the North American Reliability Council. But, after deliberations, it decided to keep its focus on system reliability issues and bowed out. Up stepped the Gas Industry Standards Board (GISB), which was publically favored by FERC. GISB morphed itself into the new North American Energy Standards Board (NAESB) that officially went into business Jan. 1, replacing GISB. Why should you be interested? Here is its response to that question. “In addition to supporting all four quadrants of the gas and electric industries - wholesale gas and electric and retail gas and electric - NAESB recognizes the ongoing convergence of gas and electric businesses, and ensures that its standards will receive input of all industry sectors. NAESB standards will result in a strong marketplace for services and off-the-shelf software, giving market participants choices, where before the choice was to provide in-house services or hire consulting firms to provide customized products and services. NAESB will build public-private partnerships with FERC, the Dept. of Energy, and the state commissions.” As did GISB, the NAESB plans to use the consensus approach to standards making for energy business as authorized by the American National Standards Institute (ANSI). Once developed, ANSI standards may be adopted by federal and state government agencies with authority for enforcement, e.g. FERC. In its statement of praise FERC noted, “Once the GISB develops industry consensus standards, the Commission begins rule making procedures to incorporate the standards into its regulation.” Bottom line is this: Unless you are willing to be blind sided by new energy business policies you may not like, you had better got involved. ANSI encourages active participation in standards development by all stakeholders. You can learn all about it at www.gisb.org/naesb.html. Hint: Check out the “Straw Person” proposal that addresses the FERC vision of the electric industry future 5 or 10 years hence.Continue >> Part 3 - Pres. Bush Declares “Nuclear War” on Nevada.

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